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Forex: IMF’s red pen

Risk assets had their shine taken off them after investors were given a stark reminder that a deal is yet to be done and Greece’s proposals from last Sunday are subject to considerable scrutiny. The IMF had the red pen out yesterday as it made its amends to much of the pension reforms put forward and the knock back has led to further strong language from the Greek prime minister, a reaction that is unlikely to improve relations with the country’s creditors and a risky stance to take at such a critical stage of negotiations. The single currency however is still holding its ground after a sell off yesterday saw it dip back below the 1.1200 level and this morning it is trading at 1.1190. All eyes will remain on Europe as time runs out ahead of next Tuesday’s payment deadline to the IMF, which without an agreement that is ratified by the Greek parliament would see the country renege on the €1.6 billion owed.

Today sees more US data which could move the dollar with the usual weekly jobless numbers and at the same time personal income and spending data, a key measure watched by the Fed, with both expected to increase from last month. There’s also the Market services PMI which is not such a major market mover, but is expected to rise as well from 56.2 to 56.7.

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