Next week’s Eurogroup meeting maybe the last real chance to avoid a Greek default.
Recent official discussions seemed to have focussed on providing Athens
with a bailout extension in exchange for the implementation of
piecemeal reforms.
What to watching:
EUR: Lower despite a potential Greek deal - a potential Greek deal next week need not be the comprehensive solution many are hoping for. In addition, a dovish ECB should be a bit of a drag on EUR across the board.
USD: FOMC in focus - the outcome of next week’s FOMC
policy meeting will be the greenback’s main driver. A more constructive
statement and press conference should help the currency.
GBP: Test - next week’s CPI and labour market data, as well as the BoE minutes are unlikely to push rate expectations higher from current levels. GBP/USD remains vulnerable.
CHF: The focus turns to SNB - the SNB seems less likely to turn more aggressive any time soon. CHF will likely still be driven by external factors like (abating) Greek deposit outflows.
NOK: Further easing anticipated - we expect Norges Bank to ease further next week. The currency impact should only be limited
