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Merkel To Give Greece A Push?

Merkel To Give Greece A Push?

Good morning and for those of you who are back at work today, Happy New Year! Of course, the markets don’t close over the festive period and those of you returning may notice a few changes in the rates. We have seen huge moves on the Euro and the US Dollar in the last week especially. Market movement around this time is normally much more pronounced as there is less liquidity in the markets.

The US Dollar is still strengthening as good news continues to come out of the US, and the country is still looking on schedule for an interest rate hike this year. The falling price of oil is also helping the US Dollar as Brent has now lost half its value since the middle of last year.

The big news, however, is the state of the Euro. We have seen multi-year lows for the Euro against both the US Dollar and GBP as it seems last year’s constant denials of any problems from the ECB are being ignored by the markets which are not overly confident of a rosy future.

The “Grexit” has once again reared its ugly head and Angela Merkel is rumoured to have had enough of this situation and is now willing to push Greece out of the Eurozone. That’s if they don’t jump first, obviously. This coupled with traders focussing on the imminent uptake of QE has left the Euro a pretty undesirable currency at the moment.

This week is going to be a busy one with lots of data out. As liquidity returns to the markets, the main data out is PMI construction data from the UK and CPI from Germany.

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