As had been largely expected, the Greek government was unable to meet a deadline for an agreement with lenders to release additional aid. Without that funding, it is highly unlikely that Greece will be able to make its next IMF payment which comes due on June 5th. And Greece’s existing bailout program expires at the end of the month, leading many to believe that Greece will not only default on debt payments but be forced to withdraw from the Eurozone.
As a result, the Euro was under broad and heavy pressure with the EUR/USD dropping to a session low of $1.0892, falling well away from last Friday’s 1-week peak at $1.1006. The EUR/JPY also fell to a session low of 135.1250 Yen. As reported at 11:11 am (BDT), the EUR/USD was trading at $1.0911, a loss of 0.67%, while the EUR/JPY was trading at 135.3350 Yen, down 0.71%.
US Dismal Data Dismissed
In the US, despite numbers that seem to suggest that growth in the US economy slowed during the first quarter, investors largely dismissed dismal data as temporary and have continued to hold out hope that the Federal Reserve Bank will raise interest rates this year. The US Dollar Index edged higher to 99.775 .DXY, a gain of 0.3% and a fresh 1-month peak, helped along by the Euro’s decline.