EU leaders changed earlier plans to assist Greece and it appears that German demands for tougher domestic action have won. While some parties didn't like the idea, others thought it served well for a country clearly living well beyond its means.
The €110 billion ($145billion) three-year deal is likely to deal a hard blow to the Greek economy meaning that it will grow slower than previously thought under the reduced spending and lower wage agreement. It won't see its budget deficit fall beneath 3% of GDP going into 2014 - a year later than earlier thought.
Investors let the euro slide yesterday in response to the weekend changes. EU ministers will meet to discuss a political timetable on Friday and at the same time German lawmakers will discuss the package. We will have to wait to find out whether the deal will actually go through, possibly making for a slow week. The euro eased to 1.3150 last night. There is support at 1.3115 and resistance at 1.3245. The EURUSD has been trading in more or less of a range since late April, however I would not be surprised to see some fresh large red candles open up this week.
The pound is weakening to start election week. Weekend polls showed that the ruling Labor party is closing the gap against the Conservatives and may yet win the majority of seats. Traders sold the pound yesterday on the prospect of a hung parliament and the pound slipped against the dollar to $1.5258 from a close on Friday of $1.5300. The GBPUSD is sliding this morning, currently at 1.5214. Support at 1.5210, 1.5200, and 1.5140. Strong resistance at 1.5385. Trading in a range so far this week, look towards the UK news today for direction.
Markets Closed Today
Over the weekend the Australian government imposed a super-tax on its mining companies effective in 2012. This hurt the local stock market and may have dealt a blow to the Aussie dollar. This Morning, the RBA raised its benchmark rate by 0.25% to 4.5% as expected. However, the AUDUSD has tumbled over 80 pips this morning, extending yesterday's losses.
Coming Up Today
- 8:30 GMT: UK (GBP) Manufacturing PMI
- 8:30 GMT: UK (GBP) Lending by Banks to Individuals
- 14:00 GMT: USA (USD) Pending Home Sales
- 14:00 GMT: USA (USD) Monthly Factory Orders