A one Australian dollar coin ($1.09) is seen in this picture illustration taken in Sydney April 29, 2011.
IN PHOTO: A one Australian dollar coin ($1.09) is seen in this picture illustration taken in Sydney April 29, 2011. The Australian dollar consolidated near recent highs against a broadly weaker U.S. currency on Friday and within spitting distance a huge chart objective at $1.1000, having enjoyed its best month so far this year. REUTERS/Daniel Munoz

Bell FX Currency Outlook: The Australian Dollar has traded below .7500 this morning as more than 61% of Greek voters voted no on the referendum to accept the creditors terms to the Greek government.

Australia: The EUR traded below 1.1000 briefly this morning as the chances of a Greek exit from the EUR increased after voters rejected the referendum. We would expect currency markets could be volatile as the financial markets digest what is next for Greece. It appears that Greek banks which were scheduled to open on Tuesday will not unless the ECB is willing to provide an additional EUR6bn of ELA assistance. On Monday, German Chancellor Merkel and French President Hollande will meet and the European Commission will meet the following day. In this environment, the safe haven currencies, USD and JPY, have both strengthened. These events have overshadowed Saturday’s announcements from China that 28 companies that had planned IPO’s were delaying them. In addition, 21 Chinese companies involved in the securities industry would pledge no less than 120bn yuan (approximately USD19bn) to invest in shares to stabilise the share market which has lost more than 30% from its high point in June. They announced they would not sell any shares until the Shanghai Composite index was above 4500. It closed at 3686 on Friday. Today we will see the latest local job ads data and inflation numbers and tomorrow we will hear from the RBA where there is only a small chance of a rate reduction. Most analysts believe there will be no change to the 2% cash rate.

Majors: The JPY traded below 122 to the USD briefly this morning as the safe haven currencies were initially stronger. We would expect more volatility later today when Europe opens and the US reopens after their holiday last Friday when all markets were closed. On Friday the latest PMI composite figures for June from Germany were slightly lower than expected at 53.7 versus the 54.1 level anticipated. The Eurozone Une composite figures were slightly higher at 54.2 versus the 54.1 expected while the UK composite level of 57.4 was higher than the 56.7 figure expected. All eyes will be on the contagion effect the rejection of the referendum will have on financial markets. The major share markets futures levels all point to a lower opening level today. Interestingly, European bank exposure to Greece has reduced to a level less than USD50bn as compared to five years ago when exposure was at USD275bn.

Economic Calendar 6 JUL

  • AU TD Securities Inflation Jun
  • JN BoJ Governor Kuroda speaks
  • AU ANZ Job Adverstisments

Jun 07

  • JUL AU Cash Rate Target

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