Daily FX Trading Update: Greek Debt Negotiations Lead to Ultimatum – Feb 17, 2015

Daily FX Trading Update: Greek Debt Negotiations Lead to Ultimatum - Feb 17, 2015

The US dollar regained FX trading ground when risk aversion returned to the financial markets after the Greek debt talks failed to produce a deal. There have been no reports released from the US then, as banks were on a President’s Day holiday. There are still no major reports lined up from the US economy today, leaving traders to price in their expectations for the FOMC minutes later this week.

The euro suffered another round of losses to its FX trading counterparts when the Greek debt negotiations led to an ultimatum from the EU. Greek Finance Minister Varoufakis and his men have until Friday to agree to extend the current bailout program, which would mean more austerity measures for the country, or to risk defaulting on its debt. Talks of a “Grexit” have popped up once more, leading some to speculate that other debt-ridden nations might suffer the same fate. Data due from the euro zone today include the German ZEW economic sentiment figures but updates on the Greek debt situation might play a bigger role in euro movements.

FX Trading News

The pound managed to hold its ground despite the downturn in risk-taking yesterday, as traders seem to be expecting more upbeat remarks in the upcoming release of the BOE minutes. UK CPI figures are due today and the headline figure might indicate another drop from 0.5% to 0.3%, which might lead to a bit of currency weakness. The core figure is slated to hold steady at 1.3%.

The franc continued to move in its tight FX trading ranges, as traders have been refraining from trading the currency in the aftermath of the SNB shocker more than a month ago. There have been no reports released from Switzerland yesterday while today has SNB head Thomas Jordan’s testimony on tap. Any significant announcements might lead to more volatility among franc pairs.

The yen regained FX trading ground on risk aversion, even as Japan printed a weaker than expected GDP reading on Monday. Traders might brace themselves for a downbeat BOJ statement tomorrow, which could mean a bit of profit-taking for yen pairs later on today. There are no reports lined up from Japan, suggesting that risk sentiment might also drive the yen around.

The comdolls managed to hold on to some of their FX trading gains even as risk appetite weakened on Monday. The New Zealand dollar chalked up a strong advance, as the country’s retail sales readings came in stronger than expected for Q4 2014. The dairy auction is set to take place within the day and another strong increase in prices could allow the Kiwi to extend its gains.

To contact the reporter of the story: James Brennan at james@forexminute.com