Thursday saw less than stellar news for Greece with the IMF saying that it expects Greece needs an extra EUR50bn over the next three years whilst cutting the growth forecasts from 2.5% to zero.
Ahead of Sunday’s referendum, the IMF also repeated the suggestion that Greece needs debt relief in the form of lower interest rates and extended repayment plans. However, despite the continued confusion and unrest, the Euro finished the day stronger against the US dollar. Considering the week has so far involved Greece defaulting on payments to the IMF with an exit from the Euro edging closer, the EURUSD pair is only down 80 pips since the close on Friday – this is despite a 150 gap lower on the open of the week.
With markets quiet on Friday as the US gears up for the July 4th holiday, we are perhaps unlikely to see major moves.
The Aussie was pushed lower, falling about 20 pips on the release of Trade Balance figures, as the level of exports rose and the balance figure missed estimates at -2.75B. Australia will now look to retail sales data at 04:30 today with the forecast at 0.5% compared with last month’s flat release (0.0%).
UK Construction PMI was well about expectations yesterday, out at 58.1 against 56.6. Cable jumped 20 pips on the release to 1.5611, but has now fallen back to around 1.5605.
The biggest news of the day was the US non-farm data, which came out a day earlier than normal because of the US holiday. The non-farm figure only narrowly missed estimates coming in at 223k against an expectation of 231k. The previous month however was revised down from 280 to 254, which helped weaken the dollar. The unemployment rate did fall to 5.3%, but it appears the revision of previous non-farm data was the biggest driver. The Euro climbed around 45 pips against the dollar on the release.
Outside of the Aussie retail sales figure, today’s only other release is UK Services PMI at 11:30 and with the US holiday combined with the waiting for the referendum mentality in play, there is every chance of a very quiet day in currency markets.