EUR slightly dropped after renewed negotiations with Greece

July 7, 2015, 11:21 am UTC.

EUR slightly dropped after renewed negotiations with Greece

The EUR lost ground ground during the Asian session Tuesday, but stayed away from yesterday’s lows. The investors’ hopes are that today’s summit, Greece will make new, more adequate proposal. Meanwhile, the AUD lost ground after the local central bank kept interest rates unchanged. The investors’ attention is again focused on the situation in Greece. Despite the lack of clear prospects for resolution of the situation, blocked banking and financial systems in the country signaled that it should be an agreement in the near future. After the weekend Greek voters refused to accept the proposals of creditors, France and Germany have warned Athens to deliver a new proposal to resume negotiations with its creditors.

The banks in Greece are closed from early last week as only an agreement and the provision of emergency assistance, can help avoid bankruptcy. Another important news of the day is associated with a report on the US trade balance for May. Forecasts are for a deficit of 42.8 billion USD. According to economists, the increases in the trade deficit due to the stronger dollar, which limits exports. The AUD reported minimal losses, after the Central Bank left interest rates unchanged at 2%, the expectations of the market. AUD remained near six-year low, which reported on Monday amid slowing exports raw materials to China. Trade relations with the second largest economy in the world are the main source of income for Australia, and news of slowing industrial growth in Beijing, negatively impacting the Australian dollar and other commodity currencies.

The EUR is losing ground against USD in today’s session, referring to the psychological level at 1,100 and a break we can expect reaching lows last week at 1.0955. The pair is hovering around the 89-day moving average, signaling that there is currently no clear short-term trend. When you hold the price below 1.0955, we can expect consolidation of the advantage in favor of the USD and falls to the bottom of 27 May at 1.0814.

July 7, 2015, 11:01 am UTC.

Australia kept key interest rate at 2%

Australia kept key interest rate at 2%, which is a record level. However, the Australian Central Bank said there is still the possibility of loosening the policy. The last institution adopted a course correction at the rate of May 5. Since then, Australia kept key interest rate and the central banker are waiting to see what will be the impact, if any, from lower interest on growth. Australian Central Bank noted that “will inform the evaluation board (central bankers – note. Ed.) Whether the current stance of monetary policy most effectively promote sustainable growth and inflation consistent with the target”. Depending on changing conditions institution can discover the rate further.

Australian economy expanded by 2.3% in the first quarter compared to the same period last year, surpassing forecasts of most experts. Surveyed by Reuters analysts predicted an increase of 2.1% annual growth after growth of 2.50% in the last quarter of 2014. The Australian economy was hampered by the sharp decline in commodity prices, weaker external demand and the persistently high level of unemployment. The budget deficit is extremely high, as estimated by Deloitte will reach a whopping $ 46 billion. Australian dollars this year. The analysis experts accelerate fears that the country’s top AAA rating may be at risk.

July 7, 2015, 10:55 am UTC.

Greek companies started payment to employees in cash

The Greek companies started payment to employees in cash after the extended bank vacation. At least three Greek companies, including the largest chain of electronic appliances have paid their employees in cash after the government imposed restrictions on withdrawals of funds by banks last week in an attempt to prevent a possible collapse of the banking system. Actions Kotsovolos, a division of the British merchant Dixons Carphone, and two companies are a reaction to the financial crisis in the country, after Greece closed its banks and restrict withdrawals from ATMs to 60 euros per day.

The control over the capital began to reflect on the budgets of Greek households and stifle the normal course of operations for many businesses. On Monday, it became clear that Greek creditors will remain closed until at least Wednesday. A spokesman for Dixons Carphone said Kotsovolos paid staff in cash last week. The company monitors developments in the negotiations between the government and creditors to find out what to do this week. Two other major companies operating in Greece, are also paid all or part payment in cash. Others consider to offer the scheme to their employees as an option for the next scheduled payment at the end of the month highlighted told Reuters people familiar with the matter, requested anonymity.

July 7, 2015, 10:48 am UTC.

Saudi Arabia invest 10 billion USD in Russia

The State Investment Fund of Saudi Arabia invest 10 billion USD in Russia, sending a strong signal of convergence of views between Moscow and Riyadh. The fund signed a contract with the Russian Direct Investment Fund for the largest amount of foreign direct investment in the history of Russia, Moscow announced late Monday. The deal, which stems from the Memorandum of Understanding signed between the two countries during the economic forum in St Petersburg last month, comes amid attempts by Riyadh and Moscow to restore relations after the Russian government’s support for the regime of Bashar al-Assad in Syria.

“The first seven projects received preliminary approval and we expect to achieve ten deals before year end”, said Kirill Dmitriev, Chief Executive Officer of the Russian Direct Investment Fund. Dmitriev said that the Saudi defense minister Mohammed bin Salman Al Saud has played a “huge” role in the deal. The Prince visited St Petersburg with a large delegation during the economic forum and met with President Vladimir Putin and with the world leaders of investment funds.

After Salman King ascended the throne in Saudi Arabia in January, his government and that Putin is trying to overcome their differences on possible ways out of the four years of civil war in Syria. While Riyadh supports “moderate” Islamists in Syria, Moscow remains firmly against any link to Islamist forces as a means to stop the rapid expansion of the Islamic state.

By the Russian Direct Investment Fund indicated that the funds will be invested in infrastructure projects, trade, logistics and agriculture for five years. Moreover Dmitriev urged European investors to look at the deal Russia with Saudi Arabia as a signal to return. “Europe must continue to work with Russia”, he said.