Markets will remain firmly focused on events in Europe following yesterday’s confidence vote in Greece. The government won the vote, opening the door to a modest bounce in the euro, with the USD/EUR rate trading around the $1.44 level. However, the government now faces the arduous task of trying to pass an austerity plan (a five year, €28 billion package of tax increases and spending cuts, as well as plans for asset sales) that will secure further funding from the EU/IMF. Thus, upside in the euro could be limited for …

Given market hopes that euro zone officials will reach a deal in time to help Greece avoid a debt default, the euro exchange rate has recovered from lows of close to $1.43 seen versus the dollar yesterday. At the same time however, sentiment remains fragile given the hurdles that still have to be crossed before next week’s EU Summit. Lifetime lows versus the CHF were also seen yesterday as investors moved into the safe haven currency, with the EUR also slipping back versus the GBP. Sentiment was not helped by …

The euro fell towards $1.43 over the weekend dragged down by ongoing concerns about the fate of Greece. It has since recovered some ground on a bout of short covering but downside risks remain. As key meeting dates approach (the Summit of EU heads takes place on 24th June) markets will be watching for any updates on the terms of a second bailout package for Greece. In this regard, the parties involved seem to be as far apart as ever with Germany remaining of the view that it wants to …

At its monthly press conference yesterday the ECB indicated that eurozone interest rates will rise at the next policy meeting in early July. As such a move has already been priced in by markets; the confirmation from Trichet had little impact on the euro. Indeed, the currency actually fell back over the course of the press conference as Trichet offered little insight in terms of further rate hikes beyond July. If anything, a slightly softer outlook for growth and unchanged inflation forecasts saw markets pull back in terms of their …

Oil prices experienced massive volatility on the back of the OPEC meeting yesterday. OPEC consists of 12 oil producing Member Countries and one of their prime aims is to coordinate and unify the petroleum polices of the Member Countries. Yesterday’s meeting was assembled to develop a consensus on how to manage the high oil price, which some believe has been driven up by speculation. The aim of the meeting was to agree to an increase in production in order to help stabilise the oil price and ultimately bring it down. …

The dollar fell to a one-month low below the Y80 level versus the yen in early morning trade with the Japanese currency bought on the back of heightened risk aversion reflecting falls in Asian share prices. The USD was also weighed down by remarks from Fed Chairman Ben Bernanke, the tone of which reinforced market expectations that US interest rates will remain extremely low for some time to come.
Speaking at a conference, Bernanke gave a downbeat assessment of the economy, saying that growth has slowed. At the same time …