LONDON, July 3, 2015 /PRNewswire/ --
With the US Independence holiday and the impending Greek referendum on Sunday, today is likely to be a day of relative subdued trading in FX markets and elsewhere. Yesterday's US employment report set the tone for a softer dollar. Even though the unemployment rate moved lower and down to 5.3%, the combination of a softer headline jobs numbers and downward revisions to prior months it wasn't the backdrop that served to seal the deal on a September rate increase from the Federal reserve. Interest rate markets have further reduced the probability of a September move, with the pricing around 25% chance according to Fed Fund futures.
On the data calendar, there is just final PMI data for the Eurozone released this morning, together with services data in the UK. We've seen Chinese stocks fall further overnight; no great surprise with that given the recent price action. That has impacted on the Aussie to a degree, with AUDNZD back to 1.13 having failed to push above the 1.14 level yesterday. The yen remains the real winner from the week so far, with the Kiwi taking the other side, given expectations for a further easing from the RNBZ later this month. As for Sunday, the feeling is the risks are skewed to the downside for the single currency. A rejection of the proposals would put Greece on course for an exit from the single currency. An acceptance would open up the doors for negotiation, but we have to remember that the proposal is also effectively null and void in itself, so it would be back to the drawing board.
Simon Smith, Chief Economist
Legal: The information in this article is not directed at residents of the United States, or targeted at the general public of any particular country. It is not intended for distribution to, or use by, residents in any country where such distribution or use would contravene any local law, or regulatory requirement. This marketing material should not be construed as a personal recommendation or as investment advice.
Risk Warning: Transactions in Contracts for Difference and Foreign Currency are leveraged products that can result in the loss of all your invested capital. These products may not be suitable for everyone. Please seek advice if you do not fully understand the risks. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risk involved and take into account your level of knowledge and experience. Seek independent advice if necessary.