Greek banks shut for a week

Today's Highlights

Greek banks shut for a week

Tsipras effectively calls referendum on Euro membership

FX Market Overview

Glastonbury is over, Kanye West flopped, Top Gear is over and in my opinion last night's final episode with Clarkson, May and Hammond proved it was time to go anyway but Greece's membership of the Euro may also be over after Prime Minister Tsipras decided to go to the people to get their say on the latest EU proposal. Tsipras and his government are urging people to vote NO to the latest plan and that would effectively mean an exit from the euro. Greece is going to default on its much discussed €1.6 billion payment to the IMF but, if the Greek public vote YES to the EU plan, there would undoubtedly be ways and means to keep Greece within the Eurozone. No one quite knows because this has never happened before but I where there's a will, there's a way.

Many believe a week in which Greeks will only be able to withdraw €60 a day from ATMs and in which banks will be closed is going to be enough of a portent of the future without EU backing that Greeks will vote for the EU plan and stay within the euro. This is in spite of voting for Tsipras's manifesto to no more austerity. Perhaps pragmatism will rule the day after what promises to be a nightmare week for all Greeks.

In the short term, the euro is already weaker but may weaken further. The Sterling - Euro rate tested €1.43 overnight but profit taking brought that back down by a cent or so. This week does bring employment, inflation and other data from the Eurozone but I suspect that will be largely ignored unless the published data wildly differs from the forecasts.

The impact of nervousness over Greece and the wider Eurozone is not limited to the Euro though. We have seen weakness in the Australian and New Zealand Dollars as investors take steps to reduce their riskier investments (cross currency in particular) and channel their funds into safer havens. Hence strength in the US Dollar, the Pound and the Japanese Yen. None pay much in the way of interest but all are considered safer than the Eurozone at the moment.

This week also brings the US employment data; a day early on the Thursday because Friday is being taken a public holiday in lieu of Independence Day; the day when Americans celebrate Will Smith saving the word from aliens or something like that.

For its part, sterling will; be influenced by the euro but also by today's mortgage data, tomorrow's release of the May unemployment rate and more importantly, tomorrow's release of the first estimate of UK economic growth in Q2. Something like 2.5% annualised growth is forecast and anything more than that will, boost6 the Pound no matter what is happening in Greece.

This will undoubtedly be an historic week for the Eurozone. Either Greece will bow out through the democratic voice of the Greek public or it will stay in the Euro through the same process. If the latter is the case, it will make next week just as tumultuous. Hold on tight, it's going to be a bumpy ride and I have absolutely no doubt that if you are a buyer or a seller of almost any currency, you will achieve the best results through automated orders set at strategic technical levels. Speak with your halo Financial Consultant about how you can use this volatility to improve your finances and how you can manage the risk of adverse movements.

Whilst you ponder that, think of the Australian Maserati owner who, having been shopping for Paint for his house, put the tin on the back seat and set off to home to get into some DIY. However, when a dog ran out into the road in front of him, be braked and swerved, dislodging the tin from the back seat. The paint tin lost its lid in the manoeuvre and spread its contents all over the interior of the car causing £40,000 worth of damage. The car's interior had a horrible end but a lovely finish.