As I had predicted in my post on Friday the Greek elections, although built up to be a huge thing for the currency markets actually didn’t lead to much change at all, it will still be indeed the coming days and weeks that will be the important part and will decide where the Euro is the head next… Once again it seems like the market is now range bound awaiting the next big push.
Assuming we still have no further news from the Greeks then the big news for Sterling Euro will be the Bank of England minutes out tomorrow morning at 09:30am. CPI data this morning is the pick of the data for the U.K today at 09:30am which may give the Pound a short term boost if it comes out that little bit higher than expected but I doubt it will be making too much of an impact on a market which just appears to have all traders eyes on our Greek friends. The Bank of England minutes will be an overview of what was said at the last BOE interest rate decision and any nod to Quantitative Easing may lead to the Pound weakining, however we did see a new stimulus package put in place last week so I don’t expect major fireworks.
The RBA overnight released their meeting minutes and it suggested that it was a close decision to cut interest rates in Australia last month which suggests the RBA may hold fire on another cut at the next rate decision. Intrerest rate cuts are usually seen as negative for the currency concerned and a hike in rates seen as positive, so the fact they may hold off may lead to the AUD gaining back some strength in the short term. The fact that the Greek scenario is now looking slightly more positive (however nowhere near fixed) may also strangthen currencies such as the AUD, NZD, ZAR and CAD.
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