Investors start a new week with prevailing anxiety and jitters and the Greek crisis and markets' sustainability is put to the test once again with a pending vote from the Greek parliament on the austerity package.
A relief movement is seen in the market with some starting to realize that the risk is too high for the Greek parliament to revoke the package and that they will realize there is no other alternative than actually passing the package, which coupled with the EU's pledge to stand behind the nation on the passed measures eased the fear slightly amid the lack of fundamentals from the area.
The dollar on the other hand fluctuated heavily with the start of the week and now trending lower ahead of the income report which is expected to show slowing consumer spending and weighing on the dollar, especially as the Core PCE expected to show contained inflationary pressures and therefore the extended low rates from the Feds.
According to the gauge for greenback's movement, the dollar index retreated from earlier intraday highs set at 75.98 to the low of 75.42 and currently flat around 75.54.
The EUR/USD continues to fluctuate heavily and currently trading to the upside after it reached above 1.42 areas. The pair rebounded from the earlier low of 1.4101 to the high of 1.4236 and we expect strong fluctuations to continue to dominate the euro for the coming days until the vote from parliament is final and expected sometime Wednesday or Thursday.
Sterling also benefited from the movement after the heavy downside move seen the past sessions, as the downside move was very violent and the pair is correcting some of the movement ahead of the GDP report tomorrow expected to confirm the sluggish status of the U.K. economy.
The GBP/USD is currently hovering around 1.5968 rebounding from the low of 1.5911 and below the high set at 16007; still the downside pressure is evident on the pair as far as stability prevails below 1.6060 areas.
As for the USD/JPY the correction across the board and the relief for equities did not sustain any gains for the Japanese yen that continues to trend higher since morning. The pair rose to the high of 80.88 from the low of 80.29 and currently around 80.68; the tight range trading is still dominating the movement with the eroded appeal for the yen after the earthquake and also as it trades around critical levels, especially for the BoJ which intensifies the fear for any sudden intervention from the bank to weaken the currency, leaving the pair sidelined amid the high volatility in the market.
The income report is to be watched closely today with chances for more volatility as the correction continues with the main focus for the week still ahead and pending the final verdict from the Greek parliament.