The Australian dollar started the week on a strong note, with an upbeat market mood supporting the risk-sensitive ‘Aussie’. Recent strong data from China also gave AUD a boost, as the ‘Aussie’ often trades as a proxy for the Chinese economy.
Meanwhile, after months of discussions, the Greek government finally agreed and implemented new austerity measures demanded by its creditors. This means a meeting this week can complete the formalities that will unlock the next part of the bailout. Greece desperately needs this €7.5 billion payment, as it has debt maturing in July that must be repaid. With the financial health of its weakest member seeming less risky, the outlook for the Eurozone has mildly improved.
It wasn’t the most exciting week in terms of data, but Italian and Eurozone GDP estimates performed as forecast, with economic expansion holding steady. Investor confidence in Germany wasn’t quite as rosy as expected, but trade performed significantly better.
The euro was also helped by political turmoil in the US; because most market activity involves either the Euro or the US dollar, when one is weak the other is usually in higher demand. Falling USD therefore pushed EUR even higher.
The largest chunk of Eurozone data is set for release tomorrow. The Markit PMIs are surveys of business leaders that gauge how things like demand, employment, sales and confidence are holding up amongst areas of the private sector. PMIs for France, Germany and the Eurozone as a whole will be releases, which could support the euro higher if they indicate growth is accelerating.
Additionally, European Central Bank (ECB) President Mario Draghi will give a speech on Wednesday, so the euro could react to any comments he makes on interest rates and quantitative easing.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)