Grexit fears dominate the news

United States Dollar:

Last week ended with GBP/USD briefly getting above 1.50 for the first time since early March as UK unemployment dropped to 5.6% its lowest level since September 2008. The accompanying wage growth data was broadly in line with expectations which showed that earnings were 1.7% higher than the three month period a year earlier. Cable reached a high of 1.5045 in late morning but failed to stay above the big number and retreated as US inflation data came out expected showing 0.2% monthly price growth for both the core and overall reading. In the absence of any top tier data from the UK or America until Wednesday it is likely UK election news and the ongoing Greek talks will affect the GBP/USD rate. Cable currently trades at 1.4945.

We expect a range today in the GBP/USD rate of 1.4820 to 1.50.

Euro:

This week is likely to be dominated by news of a possible Grexit from the eurozone in the run up to next crunch meeting between Greece and its creditors on Friday. With Greece needing to repay the IMF nearly €1B over the next three weeks the markets are once again preparing for a potential default. Rhetoric from IMF head Christine Lagarde cut an uncompromising tone over the weekend with comments made to the Financial Times once again stating there wouldn’t be any extensions to the repayment deadlines in place and that “patience was running out with the new Syriza government.” EUR/USD is trading at 1.0780 with GBP/EUR sitting at 1.3865. Data-wise, tomorrow’s German ZEW Economic Sentiment is the first release of any note this week with a slight uptick to 56.0 expected.

We expect a range today in the GBP/EUR rate of 1.3790 to 1.3950.

Aussie and Kiwi Dollars:

The commodity currencies got a boost over the weekend as the People’s Bank of China cut its banks reserve ratio requirement by 1%. The extra stimulus saw AUD/USD jump at the beginning of the Asian session from .7785 to around .7830 with NZD/USD moving through 77 cents to currently trade at .7715. Tonight sees RBA head Glenn Stevens giving a talk in New York as well as the release of the minutes from the last RBA meeting held earlier this month. There is no top tier data this week at all from New Zealand so it will probably takes its lead from the Australian data-feed. GBP/AUD is at 1.9125 and GBP/NZD is at 1.9390.

We expect a range today in the GBP/AUD rate of 1.9020 to 1.9270.

We expect a range today in the GBP/NZD rate of 1.93 to 1.9510.

Data releases for the next 24 hours:

AUD: RBA Gov Stevens Speaks; Monetary Policy Meeting Minutes
EUR: No data
GBP: No data
NZD: No data
USD: No data