FX round-up: Greek politicians have no right to use 'blackmail'

Foreign exchange markets continued to shrug off the uncertainty around Greece, even after the Eurogroup meeting of finance ministers was cut short and another emergency conclave was called for Saturday morning.

Analysts believe that if an agreement is not forthcoming by Monday then the risk of capital controls having to be imposed will rise sharply. That comes as reports indicate that opposition is growing within the European Central bank for maintaining ELA support for the country's lenders.

Speaking on Bloomberg TV on Friday morning, ex-European Central Bank president Jean Claude Trichet angrily denounced that Greek politicians do not have the right to use "blackmail". That followed a question from the presenter regarding whether the current ECB chief, Mario Draghi, should be as tough with Greece as Trichet had been with Ireland.

Euro/dollar ended the Thursday session 0.13% higher at 1.1205.

Stateside, personal consumption rose at its fastest pace in June in almost six years, at a 0.9% month-on-month clip, figures released by Department of Commerce showed.

In the background, the latest update to the Federal Reserve bank of Atlanta's GDPNow model revealed US GDP would expand at a 2.1% pace in the second quarter, up from the 2.0% pace seen on 23 June.

Dollar/yen slipped 0.25% to 123.563.

Cable was 0.28% higher to 1.5748 by the end of trading.

In a speech, Minouche Shafik, Deputy Governor at the Bank of England said that UK long-term yields are extraordinarily low. This could be interpreted as financial markets expecting prolonged low growth or low inflation, or both.

However, the factors pulling down today’s inflation are unlikely to be permanent, and the economic headwinds should ease gradually.