Euro weakens as Tsipras summoned to Brussels
Currencies Direct June 24th 2015 - 2 minute read
Greek talks remain on the table, but that didn't stop the euro from breaking its recent trading range in yesterday’s (24 June) session. A market-wide selloff for the euro highlighted the negative correlation from European equities, which repaired several days of losses thanks to recent headlines that could be evidence of progress.
Greece is working frantically to release the €7.2 billion bailout it needs to pay back the International Monetary Fund’s (IMF’s) loan of €1.54 billion, due at the end of the month. The bailout has been withheld from Greece for months.
A conference between European Central Bank President Mario Draghi, IMF Director Christine Lagarde, European Commission President Jean-Claude Juncker and Eurogroup President Jeroen Dijsselbloem will happen today (24 June). An assembly including the Eurozone’s finance ministers is set for this evening, where they’ll deliberate on the reform package.
Tomorrow’s Eurozone meeting of EU leaders will allow for any last comments on the updated allowances. To avoid a default on 30 June, Greek Prime Minister Alexis Tsipras will need his parliament to put a definitive agreement together.
That will not be Mr Tsipras’ only obstacle, however. Already there are demonstrations across Greece against his proposed tax rises and pensions reforms, and he’s been summoned to Brussels for an emergency meeting this morning. That could be a sign that some of his creditors lack faith in his plans – but for quite different reasons from those marching on the streets of Athens.
Ms Lagarde is said to have strong misgivings about the viability of Greece’s proposals, and it’s no secret that German Chancellor Angela Merkel will have to deal with a party revolt if she agrees to a plan that has little chance of succeeding. In short, the euro’s rough ride is far from over.
Sterling and US dollar still waiting for news on rate rises
Elsewhere, the Greenback made ground following comments by a US Federal Reserve official who supports rate rises in 2015, while Sterling markets reduced the gas on the UK's own forecast rate rebound.
There is plenty of open ground for the US dollar and the pound to cover, but fewer events to help us determine when rate rises will be.