Australian dollar becalmed amid Greek drama

The Australian dollar was little changed today as traders awaited news on negotiations over Greek debt and that country’s future.

The Australian dollar was little changed today as traders awaited news on negotiations over Greek debt and the country’s future as part of the economic union.

At 5pm, the Australian dollar was trading at US77.89c, compared with US77.60c late on Friday.

Negotiations with Greece would be the key focus this week, as the countdown towards Greece’s end-June loan repayments loomed, said James McIntyre, economist at Macquarie Bank.

In Asia today, the US dollar slipped against most of Asia’s currencies as punters pushed the euro higher at the open of European markets on the possibility that Greece could sneak in a last-minute deal with its creditors at an emergency meeting scheduled for later today.

McIntyre said if talks with Greece fail, the shock effect on the global economy might be significant.

“Were a default to result in the US Federal Reserve delaying its rate lift-off, the Reserve Bank of Australia may need to deliver a rate cut to prevent a rise by the Australian dollar,” he said.

A Greek exit scenario, might also set off a chain reaction of bets on other peripheral eurozone nations opting to break away from the currency union.

Locally, the economic data flow is thin all week, with no speeches by key policy makers scheduled.