Euro rates fall as Greece claims to be near a deal

There was confusion yesterday afternoon as Greek PM Alexis Tsipras claimed that his country was close to agreeing a deal with its lenders – sending stock markets higher and the Euro up in value. His claim that the parties were on the “final stretch” towards a deal was however disputed by European Commission insiders, in confusing scenes which were as much about politics as economics – but markets around Europe seemed to believe that there might be some truth to the Greeks’ claims, which would avert a crisis as soon as next week if Greece is unable to repay its debt interest without new funding being agreed.

In fact as well as a more expensive Euro, rates for sending money abroad fell back for holders of sterling yesterday, with the Pound losing ground against the US Dollar and Canadian Dollar too, in the absence of any significant economic data.

This morning attention turns back to matters at home, with UK GDP figures published at 9.30am. This is a revision to the recent initial estimate of the growth in the economy in the first quarter of 2015, which was 0.4%, and the Pound is sensitive to any revision from that figure, of course an improvement likely to send exchange rates higher, and vice versa.

After that we have Eurozone consumer confidence (10am) and US home sales (3pm) before a quiet day of statistics on Friday to finish the month.

The headlines and exchange rate movements are likely to continue to be dominated by Greece, and with the GBP-Euro rate still near 8-year highs, if a new deal is done then we would expect to see significant Euro strength with the single currency becoming more expensive again.

Australian Dollar rates best since 2009

Buying the Australian Dollar is now at its cheapest price since 2009 – with the Aussie dropping in value by around 15% against the Pound since September. Don’t forget, as with all major currencies, you can fix an exchange rate up to a year in advance with Currency Index to take advantage of movements in the market like this one.