Greek banks reopen today, and without a daily withdrawal limit – although there is a weekly withdrawal limit instead, set at the equivalent level. The Greek banks remained shut for longer than the US Federal bank holiday of 1933 – arguably the Greek situation is worse, and the solution less effective.
The risk is that a Euro in a Greek bank is perceived as having less value than a Euro in physical form in Greece, and that a dual economy emerges – one cash based, one electronic. A cash based economy is more difficult to tax, of course.
Foreign exchange markets have been content to take the dollar a little higher as US inflation continues to pick up, and the Fed signals a desire to tighten monetary policy. Real Fed Funds are set to decline significantly in the absence of some kind of Fed action.
German producer price inflation came out in line with expectations, and is not normally a focus (even on a slow news day). However inflation pressures are clearly building, albeit slowly, in the German economy. The combination of higher inflation perceptions and quantitative policy may raise some political tension.