Greeks defy Europe and vote "no" to austerity

Australian Dollar:

Having now dropped for a third consecutive day the Australian dollar opens this morning at its lowest level in more than six years when valued against its US Counterpart. Despite reaching a high of 0.7738 last week, falling iron prices, disappointing retail sales numbers as well as heightened concerns over China’s economic health have all weighed on the Aussie dollar which opens this morning comfortably below its critical support level of 75 US Cents. With Greece’s decision to vote overwhelmingly against the terms of the EU’s latest bailout also deteriorating broader market sentiment the Australian dollar opens on very shaky ground as it currently swaps hands a rate of 0.7465. On the outlook this morning, volatility levels are expected to be high as markets digest Greek headlines in the context of an already weak backdrop.  

• We expect a range today of 0.7400 – 0.7520

New Zealand Dollar:

Following Greece’s decision to reject creditor’s demands for more austerity, the probability of Greece leaving the European Union has substantially risen. Triggering a notable move back into traditional safe haven units the New Zealand dollar opens this morning at the mercy of broader risk flows as it currently buys 66.84 US Cents. In what’s expected to be a session dominated by heightened price activity the waters ahead for Greece remain very much unchartered with the weekend’s “no vote” unlikely bring forward any quick fixes.

• We expect a range today of 0.6620 – 0.6740

Great British Pound:

The Great British Pound has struggled to maintain its value in the wake of a notably stronger US dollar which has rallied off the back of Greece’s decision to vote against the EU’s most recent bailout. Emphasising just how large the move has been, the Sterling opens this morning more than one full US cent away from Friday’s high of 1.5643 that is despite a UK Services PMI read which signalled strong growth during June. Opening lower when valued against the Greenback the Sterling is stronger against both the Australian dollar (2.0797) and the New Zealand dollar (2.3351). As investors sit back and digest the fallout from Greece’s bailout vote, the final outcome still appears some time off.   

• We expect a range today of 2.0730- 2.0860

Majors:

With US markets remaining closed for the July 4 long weekend, all eyes were clearly focused on Greece who overwhelmingly voted on Sunday to reject terms of a bailout. In a decision which clearly brings into question Greece’s membership within the European Union, the most recent sign of defiance threatens to create further divisions.  With nearly half the votes already counted, official figures showed 61 percent of Greek’s have already rejected the bailout offer, a decision driving broader flows back into the world’s deepest and safest pockets. Shutting down any hope of a quick resolution, no emergency talks with creditors have been scheduled at this stage. Not surprisingly higher volumes and levels of volatility have followed this morning with the EUR/USD dropping more than 150 basis points, passing through support at 1.1000. With the Greenback being the major benefactor growth and commodity linked currencies open lower across the board in what’s likely to be a bumpy 24 hour window.

Data releases

• AUD: ANZ job advertisements m/m, MI Inflation gauge m/m 
• NZD: No data today
• JPY: No data today   
• GBP: No data today
• EUR: No data today   
• USD: ISM non-manufacturing PMI