sign up log in
Want to go ad-free? Find out how, here.

Despite financial market holidays, Greece talks down to wire with internal pressure high. Eyes on NZ trade data, expecting weakness

Currencies
Despite financial market holidays, Greece talks down to wire with internal pressure high. Eyes on NZ trade data, expecting weakness

By Raiko Shareef

The long weekend enjoyed by US and UK markets, as well as a complete absence of notable data, meant an incredibly subdued 24 hours in markets, especially set against Friday’s fireworks.

Major currencies kept to very tight ranges, the only notable new feature being EUR/USD getting comfortable below 1.10.

As a result, the USD is a touch higher, with the Bloomberg Dollar Spot Index up all of 0.1%.

For the technically-minded, EUR/USD’s slip below 1.10 is rather exciting, as it breaks a key line of support at 1.0995.

Overnight, EUR/USD bounced off the 50-day moving average at 1.0954, but we don’t imagine it would have held, had there been materially negative news. The push below 1.10 opens up the prospect of a quick test of 1.0640. EUR currently sits 0.3% lower at 1.0980

From a fundamental perspective, the ongoing negotiations between Greece and its creditors remains front of mind, especially with the wall of repayments due to begin in just days, starting with a €300m chunk to the IMF on 5 June.

The market is positioned for a deal to be struck by end-May, but events over the weekend would have caused some unease. In particular, a faction of the ruling Syriza party only narrowly lost (75-95) a motion calling for the Greek government to halt talks with creditors if they continue to “blackmail” the country. Instead, the country should seek “an alternative solution”. Watch this space.

As we write, NZD/USD is not one point changed from yesterday’s opening levels. Thanks to EUR’s underperformance, NZD/EUR has posted a 0.3% to 0.6660, its highest level since early May.

There is little on the local agenda to materially alter the path of NZD, notwithstanding a Fonterra 2015/16 payout estimate, which is due any day now.

Today’s local trade balance figures are expected to reflect weakness in primary export prices, with export values set to fall 10% in the April numbers.

The offshore calendar picks up serious pace this evening, with a litany of important releases due from the US. In particular, durable goods orders, the services PMI, and the consumer confidence numbers will be watched.


Get our daily currency email by signing up here:

Email:   

 


Daily exchange rates

Select chart tabs

Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
Daily benchmark rate
Source: RBNZ
End of day UTC
Source: CoinDesk

Raiko Shareef is on the BNZ Research team. All its research is available here.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.