Afternoon analysis 25.06.2015:
The markets were little affected by the variety of proposals submitted by Greece and the country's creditors. The EUR/USD hovered near its previous close in spite of the information that creditors made an ultimatum. The zloty increased against the franc on comments from the SNB President.
There was a variety of information concerning the Greek crisis on Thursday. The latest were that the creditors submitted their own reform plan to the Eurogroup. And Greece made its own counter-proposal. However, both projects included some concessions, thus the final agreement was still possible.
In the meantime, the European lawmakers presented a rather positive stance. The European Council President Donald Tusk said he was expecting a positive outcome of the talks. A similar assessment was presented by the Austrian Chancellor Werner Faymann. Still, the German finance minister Wolfgang Schaeuble was more restrained in his assessment.
Earlier today, the news agencies said that both Greece and its creditors had made a new proposal, which were then rejected, and new proposals were made once again. However, the information noise did not influence the markets. The Thursday session was rather calm. Moreover, there was clearly negative information that the creditors made an ultimatum to Greece.
There was not much time left for a debt deal. Greece is due to make a 1.6 billion euro payment to the International Monetary Fund on 30 June. The deadline is also a term when the current bailout program expires. If the payment is missed, the nation will default on its debt.
However, if there is no deal over the coming hours, the focus will shift to the weekend. As a result, the market sentiment will deteriorate as a similar scenario increases the probability of capital controls.
The uncertainty stemming from the Greek stand-off did not hurt the major currency pair. Moreover, the data from the US economy did not help the dollar.
Household spending climbed in May by the most in almost six years. The May report showed a 0.9 percent growth, which was a better result than the forecast. Moreover, the data on household income also exceeded the projection.
The consumption adds up to about 70 percent of the US economy. As a result, there is hope that a slowdown period has ended. In addition, today's data concerning unemployment claims were quite good (271k against 268k in the previous week).
Recently, the Federal Reserve's policymaker said that he expects two interest rate hikes this year. The data shown today support the tightening scenario in the US.
Although there was no breakthrough on Greece, the markets were rather calm. The volatility was limited even when the confounding information was published.
Given the situation, the zloty is stable with some tendency to decline. The Polish currency gained against the Swiss franc after remarks made by the Swiss National Bank President Thomas Jordan. The SNB chief considers the Swiss currency overvalued and he warned that interventions are possible.
The Greek uncertainty is the major risk factor for the zloty, that limits its appreciation potential. Until the Greek crisis is over, the probability of a stronger zloty increase is limited. Moreover, if there is no progress before the weekend, the zloty may extend losses.
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