Greece to be unfettered from the euro?

Currencies Direct June 19th 2015 - 2 minute read

Rumours of a potential Greek deal were swirling around the markets yesterday evening (18 June), temporarily pushing the euro higher against the US dollar. However, the Eurogroup meeting ended in disappointment.
 
Before the meeting, both sides had suggested a deal was unlikely. But towards the end of the day news agencies reported a potential deal between Greece, the EU and the European Central Bank (ECB), though notably without the future involvement of the International Monetary Fund. That may be the shape of the final deal – but at this stage we’re still lurching towards a default by Athens, and the Hellenic republic’s exit from the Eurozone. 
 
Bank depositors certainly seem to think along those lines, with a reported €2 billion flowing from Greek bank accounts this week alone. There’s an ECB governing council meeting later today (19 June), where the debate will be about the emergency liquidity assistance funding of Greek banks. We’ll then look to the EU leader’s summit, scheduled for Monday (22 June), which has been called at short notice.
 

Euro falls against Greenback and Sterling
 
The euro reversed sharply from its jump yesterday and is now falling against both the dollar and the pound. The 1.40 level is in sight for Sterling in early trading this morning.

 
UK public sector borrowing
 
Provisional figures for the UK’s public sector net borrowing was released at 9.30 am. Government borrowing was £10.1 billion – a decrease of £2.2 billion compared with the last financial year.

 
US dollar in for a good day
 
The dollar should get some support today after reasonably positive data from the US yesterday, led by the business outlook from the Philadelphia branch of the Federal Reserve, and today’s initial jobless claims. Like most of us, it will be taking a rest until the next data comes out on Monday (22 June). 
 
Have a great weekend.

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