Greece and Eurozone near breaking point

The ongoing Greek debt saga continues to dominate the headlines, with a deal still apparently some way off before Greece can receive the rest of its bailout funds. On Friday a deadline for an interest repayment passed, with the Greek government saying it would roll up all June’s scheduled payments to the end of the month, meaning a realistic deadline for negotiations to be concluded is now June 30th.

But despite positive noises early last week the 2 sides still seem to be a long way apart, with EU Commission President Juncker saying that Alexis Tsipras had failed to deliver a promised set of realistic proposals, and finance minister Yanis Varoufakis saying that the latest reform demands were “an aggressive move designed to terrorise the Greek government”. Surprisingly the Euro has not lost any value in the last few days – in fact it has become more expensive – so perhaps markets are still confident that a resolution will be found before the deadline.

CBI warns of tricky future for Pound exchange rates

The Confederation of British Industries has warned about risks to the UK economic recovery this morning, citing weaker than expected GDP growth, renewed uncertainty over Greece’s economic future, and the in/out EU referendum, all as major risks for the UK economy and therefore the Pound.

“Risks to UK growth are tilted to the downside. A messy resolution of the Greek crisis could spark financial market and exchange rate volatility”, said the CBI in its forecast. The forecast came as accountancy firm BDO said UK manufacturing firms’ confidence dropped at its fastest rate for two years.

Currency News this week

We also have the usual week of economic statistics due out this week, all with the potential to move the currency markets. For the latest news keep in touch with your Currency Index account manager, wherever in the world you need to send or receive international payments.
Monday: G7 meeting; German trade balance Tuesday: Swiss unemployment; UK inflation report hearings; Eurozone GDP Wednesday: UK industrial & manufacturing production; New Zealand interest rate decision Thursday: Australian unemployment; US retail sales Friday: US producer inflation