Euro
The coming week will almost certainly be dominated by the Greece / Eurozone crisis. Although an agreement was made last Friday that the existing bailout arrangements would be extended by another four months, seemingly staving off catastrophe, there are crucial details within that agreement that must be agreed this week. On Monday, the Greek government must submit a list of economic measures it will undertake, and on Tuesday these measures will be debated for acceptance by the ECB and European Commission. When the proposed measures become public knowledge on Monday, they may cause some political turbulence in Greece, where the governing Syriza party is already being attacked from the left for making too many concessions. If the proposed measures are seen as problematic for the ECB and European Commission to agree, or if there is not a consensus agreement emerging on Tuesday, that would probably shake the market and cause the Euro to slip. Even after Tuesday, the measures will have to be ratified by member state Parliaments. Therefore although trouble is unlikely, there is still an ongoing risk of problems emerging, day after day.
The President of the ECB will be testifying on the ECB Annual Report on Wednesday. The following day, Thursday, Targeted LTRO data will be released by the ECB.
The Euro is going to remain in focus for at least the first four days of this week.
U.S. Dollar
On Tuesday, the Chair of the Federal Reserve is due to testify before the U.S. Senate Banking Committee regarding the semiannual Monetary Policy Report. She will be taking unscripted questions, and the market is looking for more clarity about the Fed’s views on inflation and a possible future hike in interest rates following the Fed’s recent dovishness, so her answers might cause some volatility or give new directional impetus to the USD.
China / Australian Dollar
Early Wednesday, HSBC will release Chinese Flash Manufacturing PMI data, as China comes back online after a two-day public holiday. The data is expected to influence the Reserve Bank of Australia, so if the number is weak, it will probably push the AUD down.