This week turned out to be another week driven by risk aversion as concerns of Greek debt crisis dominated the market… and once again it affected the Euro negatively. With Greece PM Papandreou having survived the No Confidence vote, which in turn paved the way for the Austerity Plan vote on Tuesday, the entire market is finally seeing some hope for the Euro and preparing for the inevitable rate hike in early July by ECB.

In the U.S., Bernanke and the rest of FOMC voted unanimously to keep rates unchanged and confirmed the ending of QE2 by June. Although Bernanke was playing down recent slew of negative economic data, market still remains optimistically cautions over the direction of the USD, especially considering Bernanke’s comments of reserving the right for more stimulus and/or other “tools” at his disposal… All in all, market’s take on the FOMC’s statement was positive for the USD, as EURUSD dropped 200 pips within 24 hours of the press conference…

In Asia, RBA Minutes stated that rates will rise but not right away, as current monetary policy seems on target; China’s Wen stated that inflation is under control, which added some demand for AUD as China is Australia’s largest trade partner.

In Canada, BOC commented that Canadian economy is facing strong headwinds, which essentially drove down the CAD. Combine that with the recent decision to release the strategic oil reserve and the strength of USD after Bernanke, CAD’s outlook is turning more and more bearish by the week.

Next week, we’ll have a light economic calendar and the main market focus will be on the Greece Austerity Plan vote on Tuesday. With EU/IMF announcing an agreement today on the current 5 year Austerity plan, the passing of this bill will end the Greek saga and avert possible default concerns… I believe EURUSD may be positioned for gain as concerns over debt crisis ease this week, and demand for EURO rise on the back of speculation for ECB rate hike next week…

Here’s the list of tradable news releases for next week:

Wed June 29, 2011 – 7:00am EST – CA Core CPI m/m
Thu June 30, 2011 – 8:30am EST – CA GDP m/m
Fri July 1, 2011 – 4:30am EST – UK Manufacturing PMI
Fri July 1, 2011 – 10:00am EST – US ISM Manufacturing PMI

… once again, let’s not forget to focus on the ongoing development of the Greek saga.