After a recent torrid run against its peers, the euro has been the major winner this week, strengthening across the board as the Greek debt crisis looked close to a breakthrough.
Although the week did start with the Greek government bluffing about reaching an agreement with their creditors, renewed optimism that a deal could be struck saw the euro make tentative gains as the week carried on – and this was intensified thanks to the first annual increase in consumer price data since December.
This positive news allowed European Central Bank (ECB) President Mario Draghi to discuss the positive impact of the ECB’s recent quantitative easing policy in his address on Wednesday – and following this positive sentiment the euro pushed to a one month high against sterling on Thursday. What’s more, having fallen significantly against the US dollar over the past few weeks, the euro was also able to return to a two week high against the US dollar as we move into Friday.
Today was the deadline for Greece’s repayment of the €301 million to the International Monetary Fund (IMF) given to them as part of their first bailout. They have now advised the IMF that this payment will not be made and it is also now clear that pressure in Greece is mounting on their President not to give in to the lenders demands.