With Greek economic struggles deteriorating, and with talks to unlock bailout funds showing no sign of progress, the situation in Greece is having a massive impact on investor confidence. With the deadline before the bailout funds expire fast approaching, this week’s talks will be of heightened significance. Many European officials have expressed distaste for the way Greece has handle the situation thus far and there is an increasing reluctance to give aid.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Fluctuate on Geopolitics
As explained above, geopolitics in Greece will be the most likely driver of Euro changes. However, there are several data publications with the potential to influence shared currency volatility. The most significant of said publications will be the German ZEW Economic Sentiment Survey for June, which hit 41.9 previously. It will be of interest to see whether the situation in Greece has impacted upon German’s confidence in their own economic prospects.
In terms of British economic data, the Consumer Price Index will be the most significant publication over the coming week. Having dipped into deflation territory, it will be interesting to see if Bank of England (BoE) Governor Mark Carney’s reassurances that negative inflation will be temporary rings true. Other British data publications which may be of interest to those invested in the British asset include: Claimant Count Rate, Jobless Claims Change, Average Weekly Earnings, Unemployment Rate, Employment Change, Bank of England Minutes, Public Finances, Central Government NCR, Public Sector Net Borrowing and PNSB ex Banking Groups.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate on US Rate Hike Speculation
Although US data has printed comparatively positively of late, many futures traders have pared bets as to the timing of a Federal Reserve rate hike. This is due to warnings from the International Monetary Fund and other high ranking officials that US Dollar overvaluation would be difficult to manage of the Fed hikes rates in September. Any suggestion of Dollar overvaluation over the coming week is likely to weigh on demand.
There will be several influential US data publications over the coming week. The most significant of which will be the Federal Open Market Committee (FOMC) interest rate decision. Although there is very little chance that the Fed will hike rates, any accompanies statements will give clues as to whether the FOMC has heeded warnings regarding overvaluation.
In addition to the economic sentiment survey; the German Consumer Price index, German EU-Harmonised Consumer price Index, German ZEW Current Situation Survey, Eurozone ZEW Economic Sentiment Survey, Eurozone Consumer price Index, Eurozone Core Consumer Price Index and the European Central Bank Economic Bulletin may be of interest to those invested in the common currency.
As well as the FOMC decision, there are other significant US data publications. Chief of which is the Consumer Price Index which analysts have forecast to move out of negative territory.
It is worth keeping an eye on the situation in Ukraine in addition to Greek geopolitics as both will have an effect on investor confidence.
The Euro to US Dollar (EUR/USD) exchange rate was trending within the range of 1.1148 – 1.1267 during Friday’s European session.
