The past trading week was dominated by the debt problems of Greece and attempts to find a solution that would be acceptable both for the indebted country and for its creditors. Yet no agreement has been reached, and with the June 30 deadline looming close, traders preferred to get rid of the euro, leading to a weekly drop of the currency.
Trading was relatively subdued during the week as market participants were unwilling to take excessive risk. The euro sank at the start of the week and was unable to recover despite weak attempts to rally. The shared eurozone currency ended week with losses as hopes for a positive outcome were waning.
There were new developments in the Greek situation as nation’s Prime Minister Alexis Tsipras decided to call for a referendum about the proposal that he has rejected. The voting is scheduled for July 5, meaning that the country will miss the deadline for the debt repayment. While it will not mean an immediate default, the news is far from being good and will likely cause a huge surge of volatility when the next trading week begins.
In other news, China cut its main interest rate by 25 basis points to 4.85 percent.
EUR/USD dropped from 1.1374 to close at 1.1169, erasing gains of the previous week. EUR/GBP declined from 0.7161 to 0.7094 and EUR/JPY fell from 139.84 to 138.26 over the week.
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