Not so fast, Greece
Yesterday’s trading saw a sell off of the GBP against the EUR as for a while yesterday it appeared as if the Greeks were drafting a deal with their creditors in an agreement that would provide much needed relief in servicing their debt. The GBP also fell against the USD in a slow continuation of the losses in the face of US strength.
The Greek government did say that they were beginning to draft an agreement with the IMF and the European Union but the positive news story was nixed as representatives of the European Union denied that any agreement had been formulated and drafted. This did not stop the ebb of GBP/EUR strength seen in Tuesday’s trading session. As it stands, no update as yet has been given on the situation and so any agreement remains up in the air.
The talk of interest rate rises for the US continues and this is adding an undercurrent of strength to the US economy. The Dollar struck a peak against the Japanese Yen, registering it’s highest value in eight years. The EUR/USD has recovered slightly on the news mentioned in the previous paragraph, but is still trading below 1.1000. Oil prices dipped on the strengthening Dollar prices and supply concerns and typically a stronger US Dollar makes dollar-denominated commodities (like oil) less affordable in other countries.
We have had this morning the UK GDP release, which showed that they economy grew by 0.3% quarter on quarter, which is shy of estimates. Year on year GDP growth remains flat and consistent with forecasts as well. Later today, we will receive Eurozone consumer confidence, some US jobs data and homes data and a consumer confidence indicator for the UK as well.