- German IFO Business Expectations: 102 vs. 102.5 forecast, 101.4 previous
- German IFO Business Climate: 106.7 vs. 106.4 forecast, 105.5 previous
- German IFO Current Conditions: 111.7 vs. 110.8 forecast, 109.8 previous
The euro was the story of the morning as London forex traders priced in the results of Sunday’s Greek parliamentary election, and what the Syriza party victory may mean for Greece and the EU next.
Because of the Syriza party’s anti-austerity views, it is understandable that the euro dropped right at the open of this week’s trade. But since the morning Asia session the euro has bounce higher, possibly on the outlook that an agreement can be made between Greece and the EU on reducing austerity while keeping the bailout funds flowing and avoiding a Greek exit from the euro zone that would have wide repercussions. This is a complicated issue that will take time to work out, but for now, it looks like currency traders are not too worried about a Grexit and we saw positive German IFO data, both of which is pushing the euro higher on the session:
EUR/USD is up 25 pips (+0.23%) to 1.1228, EUR/JPY is up 90 pips (+0.69%) to 132.79, and EUR/GBP is up 7 pips (+0.10%) to .7480
For the rest of the forex market, it looks like risk sentiment is positive with the higher yielding currencies up on the session against the usual safe havens of the Japanese yen and Swiss franc, likely on the same outlook that a Grexit may be avoided for now:
USD/JPY is up 53 pips (+0.45%) to 118.24, AUD/CHF is up 83 pips (+1.20%) to .7042, and GBP/CHF is up 192 pips (+1.45%) to 1.3366
The forex calendar for the Monday afternoon London/morning U.S. session is completely empty, so the morning sentiment on the Greece news will likely be the main influence for U.S. session currency traders without any fresh news catalysts expected. We do have a busy week ahead of us, so we may see volatility pick up as forex traders position ahead of the major catalysts of the week, mainly with FOMC meeting and monetary policy decision on Wednesday. Stay frosty!
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