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GBP Strengthens ahead of BoE Rate Decision, EUR Softens as Traders await Greek Reforms Proposal and US Dollar Edges Lower on Dovish Fed

Published: 9 Jul at 12 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Forex, Euro Crisis,

Pound Sterling (GBP)
The British Pound rallied versus many of its major peers on Thursday after having slumped significantly on Wednesday. In addition to traders readjusting positions on an unjustified depreciation, the Pound advanced in response to positive results from domestic data. The RICS House Price balance was forecast to climb from 34% to 36% in June, but the actual result reached 40%. The significant increase in house prices has been linked to heightened demand in London amid a combination of rising wages and cheap mortgages.
The Bank of England (BoE) Interest Rate Decision, due to be announced at midday on Thursday, has the potential to provoke changes for the British asset. However, given Sterling overvaluation and ongoing uncertainty in Europe, the Monetary Policy Committee (MPC) is likely to hold the cash rate at this juncture.

Euro (EUR)
After the 61% majority victory for those opposed to austerity in the Greek referendum, the Hellenic nation was given just hours to present a fresh proposal for reforms in return for unlocking financial aid. Athens was unable to submit the report in time, but European officials extended the deadline to midnight on Thursday (today). Most analysts expect the proposal to be similar to that of the past few submissions with perhaps a little more attention to detail under the new Finance Minister Euclid Tsakalotos. Many do expect Greece to ask for greater debt relief, however, given that the International Monetary Fund (IMF) recommended debt relief as the only way Greece will sustain a recovery. This is a sticky subject with European officials, however, many of which point blank refuse to relieve debt.

US Dollar (USD)
After the Federal Open Market Committee (FOMC) minutes were published, the Us Dollar softened versus its major rivals. The minutes were vague in terms of the timing of a rate hike liftoff, and any policymaker optimism was overshadowed by concerns regarding Greece. The prospect of a long delay to benchmark rate revisions would ordinarily send the US asset plummeting against its peers, but the current environment of risk-averse trading has slowed the US Dollar declination. US jobs data, due for publication later on Thursday, has the potential to provoke ‘Greenback’ (USD) volatility.
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