Forex Europe Review – Euro held firm until Greek austerity vote

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The Euro advanced to the highest level in two weeks against the US Dollar as the countdown is on for the outcome of the Greek austerity vote today. The markets are optimistic that logic will prevail and the Greek parliament will pass the measures and opt for a route away from default. The ECB has faith in a strong EU as its Chairman signalled in his speech on Tuesday at a central bankers meeting that interest rates will likely be raised as soon as next week. EURUSD peaked at 1.4447 from the session open of 1.4366. However, a few minutes before the close of the session, EURUSD plummeted 86 pips within a minute from 1.4117 to 1.4331 as news leaked out that the Greek ruling party deputy voted against the austerity measures. The Euro soon rebounded back to its previous levels to close at 1.4411 while the vote was still underway.

 

Sterling fell across the board following a slew of economic data which didn’t look too promising for the struggling British economy. GBPUSD fell to a low of 1.5987 following the release of the data but soon rebounded to 1.6056 after a news flash before the end of the session that UK inflation expectations jumped to 3.9 percent in June y/y from 3.4 percent in May y/y. Meanwhile EURGBP was fluctuating between 0.9014 and 0.8979 throughout the session except just before the session close, Euro dipped to 0.8966 for a minute as there was a news leak that a Greek party deputy had voted against the austerity measures. The vote hasn’t been finalized yet.

 

The Swiss Franc fell against the Dollar following the release of the KOF Economic Barometer which dropped in June to 2.23 from 2.30 in May, marginally lower than the expected 2.24. USDCHF rose to 0.8362 from a low of 0.8295. Additionally, overall optimism in the Euro and demand for it ahead of the Greek vote made investors shift away from the safe haven Swiss currency. In fact this heightened Euro demand lifted EURCHF to its highest level since last Thursday, surging 135 pips to hit a high of 1.2058 from the low 1.1923.

 

The Euro surged to a three week high against the Yen as investors believe the Greek parliament will vote to pass through the austerity measures today so they are buying up the Single Currency in hopes that it will shoot up after news of the vote. EURJPY shot up to 117.16 from the open of 116.45. Meanwhile, USDJPY as still locked in the range it formed overnight in the Asian session, but tended to head down towards the end of European trading, closing down at versus the open of 81.05.

 

 

EURUSD GBPUSD EURGBP EURCHF EURJPY
OPEN 

(07:00 GMT)

1.4366 1.5991 0.8982 1.1935 116.45
DAY’S HIGH 1.4447 1.6056 0.9014 1.2058 117.16
DAY’S LOW 1.4331 1.5967 0.8966 1.1923 116.11
CLOSE 

(14:00 GMT)

1.4411 1.6032 0.8987 1.2026 116.75

Note: Daylight Saving Time in effect for GMT