Euro falls to a low of 1.1130 on Friday before rebound awaiting weekend Greek talks: Jun 29, 2015

Market Review - 26/06/2015 20:29GMT 
 
Euro falls to a low of 1.1130 on Friday before rebound awaiting weekend Greek talks

The single currency fell sharply from 1.1220 to as low as 1.1130 due to the deadlock over Greek deal, however, short-covering lifted the pair later as investors awaiting weekend Greek talks.

Greek finance minister Varoufakis said Saturday's Eurogroup will try to converge on a deal that includes debt, funding; Greece has made concessions, Athens rejects 5-month funding proposal from lenders; Greece proposed that ESM rescue fund could take over Greek debt held by ECB; won't deny Greek proposal contains recessionary measures but they are aimed at higher incomes; lenders reverted to tougher demands, six Eurogroup ministers said creditors' proposal was too soft on Greece and sees no reason we will not have a deal on Saturday.

Greek government official said Eurogroup have put harsh proposal on table, made clear Greece must respond in 24 hours; creditors' threats starting to ease after Greece's refusal to yield, this allows reason to prevail. German government officials said German government plans to increase spending by 3.4 pct y/y to 312.0 billion euro in 20‎16; German government to refrain from net new borrowing in the years up until 2019.

The British pound traded in sideways manner in Asia and briefly retreated to 1.5720 in early European morning before rising to session high at 1.5767 in Europe. However, renewed selling below Thursday's high at 1.5770 capped intra-day gains and price dropped to session low at 1.5708 in New York morning. Later, cable pared its losses and swiftly rebounded to 1.5761 on active cross-buying of sterling versus euro.

The greenback fell initially to 123.23 in Asia due to active cross buyng in Japanese yen due to the decline in Nikkei-225 index, however, short-covering lifted the pair. Dollar later rallied to as high as 123.98/99 due to the rise in U.S. stock markets.

This week will see the release of Japan's industrial output and retail sales, U.K. mortgage approvals and lending, eurozone business climate, consumer confidence, economic, industrial and services sentiment, German CPI, HICP, Canada's producer prices and U.S. pending home sales on Monday.

U.K. GfK consumer confidence, New Zealand NBNZ business outlook, Australia's HIA new home sales, Japan's construction order and housing starts, Germany's retail sales, Swiss KOF indicator, Germany's unemployment rate, U.K. current account, GDP, inflation report hearings, Canada's GDP, U.S. Redbook, Chicago PMI and consumer confidence on Tuesday.

Japan's Tankan, China's NBS manufacturing and non-manufacturing PMI, Australia's building approvals, private house approvals, Japan's manufacturing PMI, China's HSBC manufacturing PMI, Swiss manufacturing PMI, Germany's, eurozone and U.K. Markit manufacturing PMI respectively, U.S. ADP employment, Makit manufacturing PMI, construction spending, ISM manufacturing PMI on Wednesday.

U.K. BRC shop price index, Australia's trade balance, U.K. Nationwide house price and Markit construction PMI, eurozone producer prices, ECB monetary policy meeting, non-farm payrolls, unemployment rate, initial jobless claims, ISM, factory orders and durable goods on Thursday.

Australia's retail sales, China's HSBC services PMI, Germany's and U.K. Markit services PMI, eurozone retail sales on Friday.