Pound slips after U.K. PMI; Greece in focus, ECB decision on emergency aid awaited
On Wednesday the pound slid against the U.S. dollar, after
data showed that U.K. manufacturing activity expanded at the slowest
rate in 26 months in June, while Greek debt concerns continued to
support demand for the safe-haven greenback.
GBP/USD
hit a trough of 1.5660 shedding 0.32%.
On Wednesday research group Markit reported that the U.K. manufacturing purchasing managers' index dropped to 51.4 last month from 51.9 in May, whose figure was revised from a previously estimated reading of 52.0.
Economists had expected the index to rise to 52.5 in June.
Meanwhile, the situation in Greece has been in the center of markets' attention.
The International Monetary Fund confirmed that Greece failed to make a €1.6 billion loan repayment by close of business day on Tuesday - the first missed payment ever happened in the history of the institution.
Attention is now turning to the ECB, which has pumped €89bn into the Greek
financial system in recent months to keep banks afloat. The Greek authorites will be waiting to hear whether the ECB will extend this
credit line when the bank’s decision-making governing council meets
later on Wednesday in Frankfurt, Germany.
The ECB turned down a weekend request from Athens to extend emergency liquidity funding by €6bn. Some economists consider the regulator may prefer to do nothing rather than risk charges of political interference, says the Guardian.
On Tuesday, with several hours before Greece’s financial lifeline vanished, the Office of Prime Minister Alexis Tsipras called for a two-year loan from the eurozone totalling €29.1bn, debt relief, as well as a temporary extension of its bailout to avoid missing the IMF payment.
At a last-minute meeting of eurozone finance ministers, the Greek
finance minister Yanis Varoufakis offered to cancel Sunday’s referendum,
if creditors agreed to the terms.
Angela Merkel, Germany's Chancellor, however, had already decided there would be no new talks until the referendum takes place.
