Market News

Recent pictures on social media during the past few hours purporting to come from Islamic State-controlled Syria show newly minted coins that are allegedly the first circulating currency minted by the Islamic State. The currency is known as the “Islamic Dinar”.

Contrary to current thinking, Federal Reserve Governor Jerome Powell is almost certain that the U.S. central bank can begin raising short-term interest rates as soon as September, followed by a second increase in December.

The US Dollar saw broad-based gains after yesterday’s report that existing home sales in May beat analysts’ expectations with a rise of 5% to 5.35 million, jumping from April’s 5.09 million which was itself revised upward.

With a possible Greek debt deal in the offing, it is only a matter of time till the dollar rebounds and resumes its position against the euro. Optimism over a possible detente with Greek creditors is shifting the focus back to the Fed and its implementation of an interest rate increase sooner rather than later and a stronger dollar is certain to follow.

Both the Australian and New Zealand Dollars moved higher versus the US Dollar during trading in Europe as investors consider the likelihood of an interest rate increase from the Federal Reserve.

Greek Prime Minister Alexis Tsipras offered some new proposals to the European Union over the weekend indicating a new willingness by Athens to make concessions that would help avert the country’s default.

The focus this week will be very much on the USD and the EUR, with hardly anything else going on concerning the other currencies.

International Monetary Fund chief Christine Lagarde told reporters that there will not be another grace period if Athens fails to make a payment at the end of the month. Lagarde said that unless Greece pays about $1.7 billion (1.5 billion euros) due on June 30th, it will immediately be considered in default.

The Swiss Franc edged higher despite expectations that the Swiss National Bank would maintain interest rates at the current -0.75%.

There were no surprises at the Federal Open Market Committee meeting Wednesday as the decision was taken to keep interest rates at zero until further notice.

The safe haven Swiss Franc surged broadly during European trade and struck a 2-week peak versus the common currency Euro as investors’ fears grows. The situation in Greece continues to deteriorate and investors believe that the government is likely to default and thus be compelled to exit the Eurozone.

The Federal Reserve will end its two-day policy meeting Wednesday with continued concern and speculation about how the combination of Greece’s stalemate and mixed U.S. economic data will influence the central bank’s push to increase interest rates.

The US Dollar had edged up versus the Japanese Yen following Haruhiko Kuroda’s comments that the Japanese central bank would not be making predictions on the Yen’s future movements.

Greece and its creditors have failed once again to come to an agreement. Instead the euro partners Monday responded to the situation with yet another contingency plan to end the current financial deadlock.

Though the debacle in Greece continues to dominate global headlines, markets’ focus will assuredly turn to the European Central Bank president, Mario Draghi, later today.