Markets seem relatively sanguine as we end the week which has seen no progress in respect to the Greek debacle and today was supposed to mark the second repayment to the IMF of the month. The euro continues to defy the bears holding ground against the dollar around 1.1220 this morning, 0.7235 against sterling and 138.60 against the yen. The single currency remains a focus as investors await a resolution to Greece’s quandary and debates rage over whether the existing bailout will be extended or a brand new third bailout will be proffered. There are problems on all sides to either option, especially the third bailout as this would involve debt restructuring that could potentially inflame the anti-austerity sentiment that is establishing itself in other parts of the Eurozone, namely Spain and this is becoming a worry for Europe’s leaders. The reality remains that without some sort of agreement Greece is not going to get through the summer without some sort of default whether that be a non-payment to the IMF, ECB or other creditors. If this remains the scenario it is hard to see much upside to the euro in the coming weeks.
Today is relatively quiet on the economic data front as we see Eurozone Industrial Production this morning, then US PPI followed by the Michigan sentiment figure which could push the dollar one way or the other.