EU session review: Euro falls after S&P says Greece may be in ‘selective default’

Data released:
09:00     EU(17)     PPI (May)    -0.2%    -0.1%    0.9%
09:00     EU(17)     PPI (May)Y/Y    6.2%    6.3%    6.7%
USA     Independence Day             

The euro weakened versus the yen after Standard & Poor’s said a debt-rollover plan for Greece may prompt a “selective default” rating for the country.
The euro earlier advanced on speculation the European Central Bank will increase interest rates this week.  The ECB on July 7 will increase its benchmark rate to 1.5% from 1.25%, according to economists.
“Sentiment was undermined with those S&P comments,” said Jeremy Stretch at Canadian Imperial Bank of Commerce. “Markets are reluctant to aggressively sell the euro, though. We need to see what the other rating agencies are going to suggest.”
The Swiss franc declined after data showed retail sales fell 4.1% in May from a year earlier. The Swiss currency has advanced 9.3% versus the dollar this year as investors sought a haven amid the euro-area debt crisis.
“There is a response to domestic data, undoubtedly,” said Steve Barrow at Standard Bank Plc.

EUR/USD set stable around session lows after it earlier failed to go ahead the resistance at $1.4580. Rate holds at $1.4515/20.


GBP/USD fell under $1.6100from session highs on $1.6140 following the release of Construction PMI data.

USD/JPY recovered from session low on Y80.52 and currently holds around Y80.71.

Traders expect a low volume session, with US markets closed for the Independence Day holiday.