The Greek saga continues- both sides have made attempts over the weekend with a view in mind that they can strike a deal however, the labor had no fruitful result. The default scenario is going to catch more fuel during this week unless the creditors do offer debt relief as the part of the package and a significant changes are made by the Greek sides so that the creditors feel comfortable with their new offer.
Unless both sides agree on a deal, capital control will be the ultimate step by the Greek government. So far, we have seen some elastic approach from the IMF when it comes to Greek negotiations, but the EU officials have not shown such a behaviour. However, most recently, we have experienced German officials taking a little bit of more liberal approach and if Germany decides that it is not going to let go Greece from the Eurozone then it is more likely that soon we will hear a fruitful ending to this story.
Moving away from Greece saga, there are number of economic events which will gauge traders attention in the UK and in the U.S. The FOMC meeting is the most important event which will drive the dollar index this week along with the equity market. The encouraging economic data released last week has increased the anticipation that the Fed will hike their interest rate during the month of September. However, the PPI data could make the Fed a little hesitant to show their aggressive side.
The focus for today will be the manufacturing and industrial production data. The U.S. industrial production data during the month of April was not very encouraging with the reading of -0.3%. The forecast for today is for 0.2%. Similarly, the manufacturing data’s forecast is for 0.3%. If both of these reading does beat the forecast, we could see the dollar index flying once again.