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Forex - Weekly outlook: June 29 - July 4

Published 06/28/2015, 07:09 AM
© Reuters. Greece to remain in focus as default moves closer
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Investing.com - The euro was broadly lower against the other major currencies on Friday as concerns over the risk of a Greek default weighed as negotiations between Greece and its creditors continued.

EUR/USD was down 0.35% to 1.1164 in late trade, and ended the week with losses of 1.74%.

The single currency was also lower against the traditional safe haven yen and Swiss franc, with EUR/JPY at 138.32 and EUR/CHF down 0.6% to 1.0429.

Uncertainty over whether Greece can reach an agreement in time to avert a default limited moves in currency markets.

Greece is due to repay €1.6 billion to the International Monetary Fund on Tuesday but without a rescue package in place it is unclear if the payment can be met.

If Greece misses the payment it risks going into default, which could trigger the country’s exit from the euro area.

The dollar edged higher against the yen, with USD/JPY easing up 0.17% to 123.84 in late trade holding below the week’s high of 124.37.

In the U.S., data on Friday showed that consumer sentiment jumped higher this month, bolstering the outlook for higher interest rates.

The final reading of the University of Michigan's consumer sentiment index rose to 96.1 from 90.7 in May and up from the preliminary reading of 94.6.

In the week ahead, investors will be focusing on developments in Greece after Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout program.

European finance ministers refused to extend Greece’s bailout beyond Tuesday, despite Greek requests to extend the program until after the referendum.

The European Central Bank was to decide on Sunday whether to continue providing emergency liquidity assistance to Greece’s banks without a bailout program in place.

Market participants will also be looking ahead to the latest U.S. employment report, due for release one day ahead of schedule on Thursday, for signs of improvement in the labor market, which the Federal Reserve has said is a key factor in deciding when to start hiking interest rates.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 29

Japan is to release data on retail sales.

In the euro zone, Germany and Spain are to release preliminary data on consumer inflation.

The U.K. is to publish data on net private lending.

Later Monday, the U.S. is to publish a report on pending home sales.

Tuesday, June 30

New Zealand is to release data on building consents.

Australia is to produce private sector data on business confidence. Reserve Bank of Australia Governor Glenn Stevens is to speak; his comments will be closely watched.

Japan is to publish a report on average cash earnings.

In the euro zone, Germany is to release data on retail sales and the change in the number of people employed.

Switzerland is to publish its KOF economic barometer.

The U.K. is to publish data on the current account as well as the final reading of first quarter economic growth.

The euro zone is to release preliminary data on consumer inflation and a report on the unemployment rate.

Canada is to publish a report on economic growth.

The U.S. is to release data on consumer confidence.

Wednesday, July 1

Japan is to publish the results of the Tankan surveys of private sector activity.

China is to publish official data on private sector growth, as well as the final reading of the HSBC manufacturing index.

The U.K. is to release a report on manufacturing activity.

The U.S. is to release a report on ADP nonfarm payrolls and later in the day the Institute of Supply Management is to release data on manufacturing activity.

Thursday, July 2

Australia is to release data on the trade balance.

The U.K. is to release a report on construction activity.

The U.S. is to release the closely watched nonfarm payrolls report, and data on wage growth one day early, ahead of the Independence Day holiday. U.S. data on initial jobless claims and factory orders is also due for release.

Friday, July 3

Australia is to publish a report on retail sales.

China is to publish data on the HSBC services index.

The U.K. is to release a report on service sector activity.

The euro zone is to round up the week with a report on retail sales.

U.S. markets are to remain closed for the July 4th holiday.

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