EU Morning Report - More austerity demanded from Greece

The euro appeared weaker against its major counterparts as markets open with Greece running out of time to meet international demands for more austerity. Various reports are suggesting that Greek leaders have been given until noon, to decide on how to react to Troika’s demands. This picture may give market participants a feeling of déjà vu, however this time is different. A number of analysts world-wide have been vocal over the past weeks, opposing rigid austerity claiming it is struggling growth. The dilemma lies with Greece’s political leaders and investors are expected to brace for wild movements in the markets throughout the day. Looking at the week ahead, European Central Bank minimum Lending Rate decision on Thursday will be a central point of attention. Furthermore, Switzerland inflation figures expected on Friday will be crucial, for the future of the 1.20 floor the Swiss National Bank has set on EURCHF.

The US dollar recorded loses last week as economic data showed strengthening US labour and boosted demand for risky currencies. Monday morning is showing a reverse in sentiment, as developments in Greece induce risk aversion, with the greenback experiencing buying pressure.

The Australian dollar carried on its 2012 appreciation during last week, rising to 1.0750 from 1.0591 versus the US dollar. The Royal Bank of Australia will decide on whether to cut or leave its lending rate untouched, tomorrow.

Oil prices opened at 97.48 dollars a barrel from 97.08. Gold rose to 1727.98 dollars an ounce from 1725.83. Silver opened at 33.6450 dollars an ounce from 33.6250.