Yesterday Greece voted against the harsh austerity measures sought by the International Monetary Fund, European Central Bank and the European Commission for a bailout package, increasing the likelihood the debt ridden nation could leave the Euro zone. Following the outcome of the referendum, European leaders have called for a summit tomorrow to decide on the next course of action. As markets continue to grapple with the macro implications of the Greek referendum, today’s economic numbers showed that German industrial orders for May slipped less than consensus.

Across the Atlantic, the Fed’s labour market conditions index and the ISM non-manufacturing index will provide additional cues to gauge the outlook for the US economy, heading into the second half of the year.

Pound Sterling – UK Markets

Sterling is trading in a tight range against the US Dollar this morning, amid the absence of any notable macroeconomic indicators in the UK to influence trading in the pair. Going forward, the Bank of England’s monetary policy meeting, later this week, will attract significant market attention. Though it is unlikely that there will be any change to the policy, the BoE Chief’s comments on economic outlook will be noted, considering the latest upbeat numbers of the services and construction sectors. Also in focus this week will be industrial and manufacturing production, NIESR’s estimate of GDP growth and trade balance numbers.

On Friday, the Pound–US Dollar currency pair failed to retain gains which followed the encouraging UK services PMI. The higher than anticipated PMI reading for June hints at a post election rebound in activity. Upbeat services, along with positive construction and manufacturing data released earlier, suggest that the economy expanded at a robust pace in the second quarter of the year.

US Dollar – US Markets

The US Dollar is trading on a firmer footing against the Euro post the weekend Greek referendum results, while it is looking for direction against the Pound this morning. Later in the US, a couple of economic releases, the ISM non-manufacturing and the Fed’s labour market conditions index, will provide further clarity on near term growth outlook. Though the recent Markit PMI numbers indicated lower growth in the nation’s service sector, investors will today note another measure of the private sector activity to gauge the performance of the economy in the second quarter. Markets anticipate that the ISM non-manufacturing numbers will tick slightly higher, in contrast to Markit’s reading. In addition, the Fed’s measure of labour market activity will be anticipated for more cues on the timing of the first interest rate rise in the nation.

The greenback remained broadly lower against its major currency counterparts on Friday, amid a thin trading session on account of Independence Day holiday.

Euro – European Markets

The Euro plunged initially against its major peers after the Greeks, during the weekend, voted against the austerity measures of its international creditors. The decisive victory for the Greek Prime Minister Alexis Tsipras and his radical left Syriza party has increased the probability of the cash strapped nation leaving the currency union. The referendum results have also set the table for fresh rounds of negotiations for a new deal, with the response of creditors’ keenly awaited. The German Chancellor Angela Merkel and French President François Hollande are meeting later today and a Euro summit is scheduled tomorrow.

Economic data released earlier in the day showed that German factory orders contracted at a smaller than anticipated pace in May, while April factory orders were revised significantly upwards. Additionally, investor confidence in the Euro zone rose unexpectedly for July, encouraging optimism about the outlook for the region's economy. Following the release of the data, the single currency is gradually rebounding against the Pound.

Other Currencies – Highlights

Data released earlier today showed that consumer prices in Switzerland unexpectedly rose in June from May, indicating decreasing deflationary pressures in the nation partly due to a rise in oil prices. On an annual basis, the economy continues to remain in deflation, though the intensity has reduced from the previous month. The economy has been impacted by a soaring Swiss Franc and the central bank continues to keep rates low to spur growth and inflation in the nation. Meanwhile, the Swiss Franc is trading on a weaker footing against the US Dollar, indicating that the upbeat CPI reading had little impact on trading.

In the session ahead, investors will eye US economic releases for further cues on trading in the currency pair. Going forward, Switzerland’s unemployment rate for June which is scheduled tomorrow will attract significant market attention.