Weekly review: Greek drama is over?

Greece's lenders agreed to provide the third bailout programme to Greece. The bailout programme should total about €90 billion. European Union finance ministers agreed to provide a €7 billion bridge loan to Greece until the third Greek bailout programme will be set up, and the amount of emergency funding (ELA) to Greek banks was increased by €900 million for one week

The Greek parliament has approved reforms demanded by Greece's creditors in return for the third bailout programme on Wednesday.

It looks like that the Greek drama is over but the main area of dispute remains: debt restructuring. Germany is against any debt relief but the International Monetary Fund insists on debt restructuring.

IMF Managing Director Christine Lagarde said in an interview with French radio station Europe1 on Friday that the IMF will participate in the third Greek bailout programme it includes debt restructuring and government reforms. €16 billion of the third bailout programme should come from the IMF.

The possible first interest rate hike by the Fed was also in focus this week. The Fed Chair Janet Yellen said that the Fed could raise its interest rate this year. But opinions of Fed officials are divided.

U.S. inflation remains low. Inflation in June rose slightly. I think that inflation should rise significantly before the Fed start raising its interest rate.

Markets are expected to be volatile. Investors will focus on the situation in Greece and the Fed's monetary policy. It is likely that the currency pair EURUSD will test the level $1.0950 or $1.1000 if news regarding Greece will be positive. In case of negative news regarding Greece and positive U.S. economic data, the currency pair EURUSD may test the level $1.0800 or $1.0700.