Dollar takes a breather, European markets slip

The dollar index paused in its ascent on Wednesday June 24th, after it hit its highest level in over a week as investors gear up for higher US interest rates.  Meanwhile, negotiations between Greece and its European creditors faltered on Wednesday, which pressured equities in Europe lower.

In early trading, European markets were down more than one per cent before pulling back. At the time of writing, Germany's DAX and the French CAC 40 were down 0.8 per cent and 0.6 per cent, respectively. The Euro Stoxx 50 index was nearly one per cent lower.
Meanwhile, the dollar index traded just above the 95 handle after climbing by 1.2 per cent to 95.64 on Tuesday, its highest level since June 12th and its best daily performance  since late May.

There is little on the US data calendar today apart from the final estimate of US first quarter GDP, which traditionally does little to markets. However, consensus forecasts suggest the US economy contracted less than previously expected, which could give the greenback a slight boost.

Elsewhere, European markets continue to dance to the beat of the ongoing Greek debt saga, which after two days of optimism took a turn for the worse on Wednesday. Greek prime minister Alexis Tsipras voiced his unhappiness that the International Monetary Fund is choosing not to support its "equivalent measures" - the plan to raise €8 billion from taxes on businesses, shoppers, income tax payers and pensioners.

Alexis Tsipras said that the refusal of creditors to accept Athens’ latest proposals is not only unprecedented but has “never happened either in Italy, Portugal. Nowhere!”.

Meanwhile, according to FT Brussels, Greece angered its creditors by backtracking on previous commitments it had submitted in its deal on Monday.

It's certainly shaken things up in Europe, as markets had soared on Monday, soaking up the news that Greece may finally reach a deal with European officials. However, time remains for an agreement to be forged and the deadline for Greece to repay the money it owes is on June 30th.