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EUR/USD flat, as Greece prepares for Monday showdown with creditors

Published 06/19/2015, 06:31 PM
Updated 06/19/2015, 06:40 PM
The euro fell below 1.14 against its American counterpart on Friday, as Greece weighed

Investing.com -- The euro fell mildly against the dollar on Friday, as the two sides in longstanding Greek Debt negotiations began preparation for Monday's emergency summit of leaders from the European Union.

EUR/USD ticked down 0.0010 or 0.09% to 1.1353, snapping a two-session winning streak. The currency pair still ended the week up by more than 1% after surging to a monthly high of 1.1438 one session earlier.

EUR/USD likely gained support at 1.1188 the low from June 15 and was met with resistance at 1.1450, the high from May 18.

One day after high-level talks in Luxembourg broke-off without a deal in the five-month long Greek debt negotiations, the European Central Bank reportedly increased the cap on its Emergency Liquidity Assistance fund for banks in Greece by €3.3 billion. It came days after depositors took out a reported €2.0 billion from Greek banks in a 72-hour period, underscoring their lack of trust in the teetering economy.

Greece is running out of time before it owes the International Monetary Fund a bundled loan payment of EUR 1.5 billion on June 30. At the same time, the remaining €7.2 billion of a €240 billion stimulus package from its international creditors is set to expire at the month.

On Monday, all 27 members of the European Union are scheduled to be present at an emergency summit in what could be Greece's final opportunity to avoid a default. During an appearance in St. Petersburg, Greece prime minister Alexis Tsipras indicated that he will be "working for success" at Monday's summit, while adding that "those who invest in crisis and terror scenarios will be proven wrong."

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Meanwhile, a spokesperson for Germany chancellor Angela Merkel said it isn't too late for Greece to complete a deal as long as it agrees to the reforms required.

Elsewhere, Federal Reserve Bank of San Francisco president John Williams reiterated on Friday that an interest rate hike could be appropriate in 2015, while adding that waiting too long for lift-off poses added risk. The remarks were the first public comments by a Fed governor since the Federal Open Market Committee opted not to issue any definitive wording on the timing of a rate hike on Wednesday.

Although yields on German 10-Year bunds fell six basis points to 0.75%, the yields are still up 16 basis points on the month. Yields on U.S. 10-Year Treasuries dropped eight basis points to 2.26%, as the spread between U.S. and German bonds continued to widen.

The U.S. Dollar Index, which measures the strength of the dollar versus a basket of six other major currencies, reached a session-high of 94.70 in U.S. morning trading before falling slightly back to 94.32, up 0.07%.

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