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Very little changed in FX markets yesterday with European Finance Ministers still unable to come to an agreement on the next disbursement of aid to Greece as it seems they are waiting on Greek politicians to vote through the new austerity measures alongside some privatisations.

There was some strength for euro after its early falls after Jean-Claude Juncker, head of the Eurogroup and Luxembourg PM, commented that the Greek parliament must approve the reform and austerity measures before 3 July, prior to another extraordinary Eurogroup meeting scheduled for 3 July. He also acknowledged that the effective lending capacity of the European Financial Stability Fund will be raised from EUR440bn to EUR780bn through higher guarantees. Of course, some of those guarantees are Greek.

Standard & Poor’s continued to weigh on the crisis as the head of European sovereign ratings said that in past experience when restructuring the debt of a country, whose creditworthiness is rated at CCC like Greece is currently, they tend not to be voluntary and investors must sustain losses i.e. the haircuts that most in the Eurozone are against.

The yields on peripheral debt remain elevated and continued to climb with Spanish and Italian debt the main movers. The credit default swaps, default insurance in short, also moved higher as investors fretted over how the crisis would be resolved.

It is not just Greece who the ratings agencies are after as typified by a note from Fitch overnight. The issue of the US debt ceiling had gone quiet of late but Fitch said it would put the US on a negative watch, primed for a downgrade, if the debt ceiling is not raised by August 2nd. This has seen EURUSD retreat a little higher to the 1.4340 level.

Today is all about the confidence vote in Greece’s parliament today following the cabinet reshuffle last week. Papandreou’s party still has a small majority in parliament and should be able to win but if this fails, new elections will have to be called and we would expect some serious euro losses. German investor sentiment is due to fall when released at 10am and the UK are expected to release public finance figures for May and June’s industrial trends survey.

Latest exchange rates at time of writing