LOC16:35
13:35 GMT
KUWAIT, July 5 (KUNA) -- Developments in the Greek debt crisis continued to take center stage last week, a report by the National Bank of Kuwait (NBK) said on Sunday.
The heightened uncertainty has triggered risk aversion in the market early in the week, supporting traditional safe haven currencies such as the Swiss franc and the Japanese Yen.
Greece's Prime Minister Alexis Tsipras had called for a referendum that already took place on Sunday (5 July), to decide whether to accept the demands proposed by the country's international creditors.
Euro-zone finance ministers have since refused the Greek government's request to extend the bailout until after the referendum. As a result, the Greek people will likely vote for or against a bailout offer which has already expired, the NBK report said.
Moreover, tensions continued to rise as the IMF confirmed that Greece has failed to make the euro1.6 billion payment due to the Fund. Greece is thus the first developed country to miss a payment to the IMF.
On the foreign exchange side, the US Dollar remained broadly higher against its major counterparts as concerns over Greece dampened risk sentiments, boosting demand for the safety of the greenback.
As for the Euro, it traded in a volatile manner last week due to the heightened tensions between Greece and its creditors. The Euro opened the week at 1.0953 a 200-point drop from its previous close.
The Japanese Yen gained dramatically at the beginning of the week as the market sought refuge amid the news from Greece. The Yen opened the week at 122.53. It then appreciated against the US dollar pushing the currency pair to a low of 121.92 as Greece missed its IMF loan payment.
Meanwhile, the report stated, the US consumer confidence increased solidly in June, with households upbeat about the labor market, supported views that the economy was back on a firmer footing after faltering at the start of the year.
Pending home sales in the US rose to the highest level since 2006 in May, underlining optimism over the health of the housing sector and supporting the case for a US interest rate hike this year.
The US economy added fewer jobs than expected last month data released on Thursday showed, tempering expectations for higher interest rates. The Labor Department reported that the economy added 223,000 jobs in June, compared to expectations for jobs growth of 230,000. May's figure was revised down to 254,000 from 262,000 previously.
Additionally, the jobless rate fell to a seven-year low of 5.3 percent as more people left the labor force. Economists had expected the jobless rate to decline to 5.4 percent.
In Europe, Britain's manufacturing growth slowed unexpectedly to its weakest rate in more than two years in June, dented by subdued export demand from Europe in the face of a strong pound.
The Markit/CIPS manufacturing purchasing managers' index (PMI) fell to 51.4, the weakest reading since April 2013, from a downwardly revised 51.9 in May. June's PMI was worse than expectations of a slight improvement to 52.5. Meanwhile the figure still indicates growth as it held above the 50 mark.
In Asia, China's manufacturing sector expanded slightly in June, though not as much as expected offering some signs that the world's second-largest economy may be starting to level out after a range of support measures.
The official Purchasing Managers' Index (PMI) stood at 50.2 last month, unchanged from the previous month's reading. Analysts had predicted it would edge up to 50.3, but growth remained tepid, with the reading just above the 50 point level that separates contraction from expansion on a monthly basis. (end)
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