FX markets start a new month which once again is supposedly crunch time for Greece, but this time it feels like it really is. The single currency was performing better last week, in part on the basis that there were more positive noises emerging, but once again such expectations appear to have been blown apart over the weekend on the back of the latest noises from the Greek government.
Greece has to repay some EUR 300 mln back to the IMF this week, although there is some talk of this being bundled up into the remaining payments later in the month. It has been the kiwi and Aussie that have taken the brunt of the pain on the dollar correction over the past week, the kiwi briefly pushing below the 0.71 level in late Friday trade, with the new low for the year now at 0.7072.
Naturally, it’s the US employment report at the end of the week that grabs the attention. After the weak first quarter, the recent run of data in the US has been better than expected, especially on the housing front. This has in part underpinned the better dollar tone, so naturally a decent showing on Friday could well serve to enhance this.
The RBA decision tomorrow should be a non-event given the latest change in sentiment at the last meeting, but it’s still worth keeping a close eye on the statement. The recent run of yen weakness continues, with USDJPY just above the 124.00 level as we come into the European session.