Daily Afternoon Report 14.07.2015

The euro rose to session highs against the dollar on Tuesday after data showing an unexpected fall in U.S. retail sales last month, but the single currency struggled to hold gains amid ongoing concerns over Greece.

EUR/USD hit highs of 1.1082, before pulling back to 1.1036, up 0.35% for the day.

The greenback weakened across the board after the Commerce Department said retail sales fell 0.3% in June, compared to expectations for a 0.2% increase.

May’s retail sales were revised down to 1.0% from 1.2% previously.

The dollar had edged lower earlier in the session amid concerns that testimony by Federal Reserve Chair Janet Yellen to Congress on Wednesday could push back expectations on the timing of an initial rate hike.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.34% to 96.60.

The euro remained on the defensive as investors waited to see if the Greek parliament would support harsh austerity measures demanded by the country’s creditors in exchange for a deal to avoid financial collapse.

Greek Prime Minister Alexis Tsipras was meeting with MP’s on Tuesday but faced an uphill battle to win support for a third bailout deal offered by the country’s creditors.

Four pieces of legislation must be passed by the end of the day on Wednesday, including pension and sales tax reforms.

Meanwhile, talks on a bridging loan for Athens, to cover repayments to the European Central Bank in July and August, were continuing in Brussels.

The euro was also modestly higher against the yen, with EUR/JPY up 0.17% to 136.01.

The greenback was lower against the yen, with USD/JPY last at 123.27, after falling as low as 122.92 earlier.

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