Euro moves higher despite Greece concerns, dollar weak after US data

The euro continued to edge higher even as a Greek default creeps closer and despite a steady stream of troubling news on Greece. There were rumours of potential capital controls and yet the single currency gained 80 pips against the dollar on Monday and slowly moving back towards the key 1.14 level once again.

Greek Finance Minister Yanis Varoufakis confirmed Athens won’t be presenting any new reforms at a Eurogroup meeting on Thursday. The Greek government now has just two weeks left until it has to pay a 1.6 billion euro bill due to the International Monetary Fund. Without more funds from its creditors, Greece could default and risk a “Grexit” as it could be cast out of the single currency. On Monday Germany’s European Union commissioner said it was time to prepare for a “state of emergency.”

Meanwhile, helping the euro higher was a weaker US dollar. Disappointing US economic data added to the greenback’s problems on Monday as it fell 80 pips against the euro and pound.

US industrial production fell a seasonally adjusted 0.2% in May versus a forecast for a 0.2% increase. This was mainly due to headwinds from a strengthening dollar and weak global demand. The Empire State survey showed manufacturing activity in New York State slowed in June to its weakest level in more than two years as new orders fell. The New York Fed’s general business conditions index fell from 3.09 in May to -1.98 in June, hitting its lowest level since January 2013. Economists had expected the index to rise to 6.0 this month. A reading above zero indicates expansion.

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