Surprise, Surprise

The Pound is only slightly higher against the Euro this morning after paring substantial gains made in the early hours following the conclusion of the European finance ministers meeting in Brussels. GBP/EUR hit 1.2489 this morning before dropping back down to its current level of 1.2438. Similar price movement was experienced by the EUR/USD which dropped off to 1.2735 before climbing back to its current level of 1.2790. Such movements shouldn’t come as much of a surprise as no concrete decision was made last night regarding Greece’s future. The only thing that is guaranteed now is that uncertainty within the Eurozone will continue.

As ministers failed to agree on a definitive rescue plan for Greece, again, any further aid payments will remain on hold until the next emergency ministers meeting scheduled for November 26th, hopefully Greece will manage to remain solvent until then. That said, no firm decision was ever going to be made yesterday on whether or not to release the final tranche of financial aid. Various European governments, including Germany, are yet to weigh in on the issue, and the Troika still needs to confirm that the Greek government has delivered on certain economic indicators, all of which is necessary before any final decision can actually made.

Looking ahead today, there is economic data due out in the US this afternoon. US Initial Jobless Claims and US Reuters Michigan Consumer Sentiment Index are both due to improve, with US Markit Manufacturing PMI expected to remain at 51. If such results meet, or even better, market expectations we could see the Dollar strengthen further against the Euro and also recover some of the losses it has suffered against Sterling over the past few days.