Yesterday ministers held talks with bailout monitors as the clock ticks on securing a €6bn debt bill. Discussions were held in Brussels in an attempt to reach a deal on pension and labour reforms that are necessary in order to unlock another tranche of bailout aid. Time is running out for Athens, with the deadline of July 2017 to secure €6bn creeping ever closer. Clients only have to think back to the summer of 2015 when the Greece crisis was in everyone’s minds and the GBP/EUR rate hit 1.44 on July 18th, the highest level for nearly a decade.
Further reforms to taxes and pensions would only cause more trouble politically in Athens. However, without Greece imposing the reforms set, then the International Monetary Fund will find it difficult to keep finding solutions.
One of the reasons why it’s worth keeping an eye on this, is that the banks in Greece have had more than €2bn withdrawn in January and February amid fears that there will be tighter capital controls later on in the year. This could provide a much needed boost for those looking to buy Euros later on this year. Today we have a non-monetary policy meeting first thing, followed by Markit Services PMI. Neither are expected to set the market alight however any deviation from what is expected does have the capability to move exchange rates.
On Thursday, ECB Monetary Policy is likely to dominate the markets as the European Central Bank delivers its latest overview. Questions have been raised of how the ECB can continue to have one fiscal and monetary policy for all members of the single currency, and if Germany and France continue to accelerate, I think Mario Draghi will have some tough questions to answer.
If Greece fails to reach the deadline without another bailout loan it could be extremely detrimental with another crisis not too far away according to EU officials.
These data releases have the makings to influence a GBP/EUR trade, get in contact to make sure you are notified of any movements in your favour by calling 01494 725 353.
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