On Monday the euro/dollar closed down but didn’t quite reach the forecasted target of 1.1070. The fall of the euro stopped around 1.1130. The euro was weak against the dollar and pound because of problems with Greece.
The European Commission convened but came to no positive conclusions about Greece. There is some progress, but the negotiation process between Greece and its creditors is slow. On 12th May Athens should pay the IMF 774 million euros. In June they have 1.6 billion euros to pay. Christine Lagard has announced that there will be no postponement for settling this debt. Therefore, without credit from the IMF, the Greeks could run out of money fast.
The pound’s strengthening has struck fear into the eurobears. I’ve not even bothered to do a forecast today because of the divergence of EUR/USD and GBP/USD. Here, either the euro will push the pound up or the pound will fall 100 points. The pound has grown by 2 figures before the quarterly report on inflation due to rumors that the central bank will reassess the UK’s GDP forecast and inflation will be reassessed downwards.
This uncertainty has 2 targets: upper – 1.1265, lower – 1.1070.