USD: remains the strongest currency in the longer term. The market is expecting the Fed to raise rates around September. Recent NFP readings have been positive in terms of jobs added. However the report for June showed no growth in Average Hourly Earnings, which is negative for the US economy. Overall, core inflation has been trending higher.
EUR: Talks regarding Greece’s new bailout proposal continue to dominate any euro-related news. The Eurogroup have given Greece until Wednesday, July 15 to enact fiscal reforms. Already a fundamentally weak currency due to extremely loose monetary policy, we are waiting for the Greek situation to be resolved one way or another before assessing medium-term direction. An exit by Greece from the Eurozone will see selling in euro whereas a sustainable resolution will likely see a relief rally.
GBP: is looking at a rate hike around the middle of 2016 and is therefore a fundamentally bullish currency in the long term. The latest jobs numbers showed much better than expected average earnings figures and this is very bullish for the pound as it brings forward the timing for rate lift-off.
