Euro drops on Grexit fears

United States Dollar:

Risk-aversion saw the dollar gain across the board yesterday with cable dropping below 1.48 on the back of ongoing concerns about a possible Greek exit from the eurozone. The dollar will likely to remain well bid as the current impasse rumbles on.
Yesterday saw a mixed bag of medium impact from the States with personal spending m/m missing the expected 0.3% gain, coming in at 0.1% and pending home sales m/m printing 3.1% growth when a more modest 0.5% was expected. Top-tier US data kicks off tomorrow with the ADP non-farm employment change from the States with 231k expected. At the time of writing the pound has received a boost with the final UK Q4 GDP figure being pushed up to 0.6% from the previous readings of 0.5%. GDP for 2014 as a whole is now estimated to have grown by 2.8%. GBP/USD currently trades at 1.4770 with tomorrow’s manufacturing PMI the next release of note from the UK.

Euro:

EUR/USD has continued to fall this morning as a possible Grexit weighs on the shared currency. Greece’s creditors are reviewing a series of potential reforms put forward by the Syriza party in exchange to receive extra funding to ensure Greece doesn’t run out of cash in the next few weeks. EUR/USD currently trades at 1.0735 after trading close to 1.09 at the start of yesterday. GBP/EUR has pushed up this morning buoyed by the aforementioned UK GDP number. It currently trades at 1.3750. This morning sees the latest flash CPI release from the eurozone, with the current level of -0.3% expected to hold. Expect further losses should this print deeper in deflationary territory. 

Aussie and Kiwi Dollars:

The latest ANZ Business confidence survey from New Zealand showed an uptick from 34.4 to 35.8 overnight. The report titled “Sultans of the Upswing” showed that economic expansion was continuing at a robust pace with estimates for growth over the next 12 months at 3%. The report briefly pushed the Kiwi above 75 US cents however this rise was quickly reversed. The situation in Australia appears slightly less rosy however with AUD/USD currently trading at .7595. The markets have raised the likelihood of another rate cut by the RBA with many expecting it to happen at April’s meeting. Tonight sees building approvals data from Australia with a monthly fall of -3.7% expected. GBP/AUD is at 1.9430 and GBP/NZD is at 1.9785. 

Data releases for the next 24 hours:

AUD: Building Approvals m/m

EUR: CPI Flash Estimate; Core CPI Flash Estimate; Unemployment Rate

GBP: No data

NZD: No data

USD: FOMC Member Lacker speaks; FOMC Member Lockhart speaks; Chicago PMI