__cfduid
Valid: 29 days
It helps us protect the website from threats such as hacker attacks. Used by Cloudflare to recognise trusted network traffic.
__lc_cid
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
__lc_cst
Valid: 3 years
Necessary for proper functioning of the chat available on the website.
rc::a
Valid: It does not expire
Cookies to correctly distinguish between human and bot-generated traffic.
rc::b
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
rc::c
Valid: 1 session
Cookies to correctly distinguish between human and bot-generated traffic.
NID
Valid: 6 months
Records a unique number to recognise the device you are using. It is used for advertising.
_ga
Valid: 2 years
Registers a unique user number to collect statistical data about how you use our website.
_gat
Valid: 1 day
Used by Google Analytics to reduce queries. Reduces the amount of statistical data collected.
_gid
Valid: 1 day
Registers a unique user number to collect statistical data about how you use our website.
yt-player-bandwidth
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
yt-player-headers-readable
Valid: It does not expire
Determines the best video quality based on your device and the Internet connection used.
The level of uncertainty increased ahead of an emergency summit of the European Union. The euro was volatile due to information noise. The zloty gave away its earlier gains as the market optimism faded.
The beginning of the Monday session was influenced by optimism that Greece may reach a deal with its international creditors. However, the second part of the day revealed a rising caution among investors.
On Sunday, Greece revealed a new reform plan. The proposal included the expectations of international creditors who anticipated reforms in taxes and the pension system. Later, comments concerning the plan were rather positive (more on the issue in our morning commentary). Given the situation, one could have expected a positive outcome from today's emergency EU summit.
Nevertheless, the market enthusiasm was dampened as the European politicians who took part in the meeting of finance ministers assessed the situation. The Eurogroup Chief Jeroen Dijsselbloem said that any final agreement is impossible as the Greek proposals came too late. Moreover, the Irish Finance Minister Michael Noonan expected the next Eurogroup meeting to be on Thursday.
These factors hit the market sentiment. It was reflected by the stock indexes which gave away some recent gains. Moreover, the emerging market currencies - including the zloty - also trimmed earlier increases. The Greek assets were also under pressure.
Limited impact
The Greek negotiation position is getting weaker with every hour. A bankruptcy scenario would be devastating for an economy that struggles with recession and record high unemployment (about 25 percent). Moreover, the banking system is fully dependent on the liquidity from the European Central Bank. If the liquidity provisions are cut off, creditors will collapse immediately.
Today, the ECB raised the ceiling on the emergency cash available for Greek banks. It was the third decision of this kind in the last six days. The limit has been increased by 2 billion euro, according to unofficial sources. As a result, the ceiling was increased by 6 billion. The value corresponds with deposit outflows from the banking system.
Nevertheless, Greek bankruptcy would have limited impact on the German economy. Estimated losses are about 1 billion euro every year starting from 2020. In total, it would be about 40 billion euro, which Greece is expected to repay. The information was given by the Bloomberg agency citing unofficial sources.
If Greece goes bankrupt, the impact of this scenario would be rather local and limited to the Greek financial markets. As a result, the broad market was quite calm and the Greek market remained volatile.
Weaker zloty
It is very likely, that there will be no crucial decisions about Greece today. As a result, the uncertainty stemming from the ongoing Greek negotiations will put pressure on the markets.
The zloty exploited the morning optimism and increased against its major pairs. However, later on the Polish currency gave away its gains. Until the Greek crisis is over, the zloty will not increase significantly.
Subscribe to our currency newsletter
See also:
Daily analysis 22.06.2015
Afternoon analysis 19.06.2015
Daily analysis 19.06.2015
Afternoon analysis 18.06.2015
Attractive exchange rates of 28 currencies
Live rates.
Update: 30s
Open your free account today
Save your time and money. Create an account for free and discover how much you can gain. Join us today, and start using attractive currency services.
Create free account