Euro is dropping, falling from highs not seen for two weeks, as Greek debt talks resume. They’re still working out the details with private bondholders on how to proceed. The euro’s recent rally has been based on the idea of the Greek deal getting done — and continued talks have some Forex traders nervous.
Back in October, private bondholders agreed to a steep haircut in order to help Greece, but many analysts think that even with the concessions from private bondholders the debt will be unsustainable going forward. As a result of some of this uncertainty, a bit of risk aversion is showing through the recent risk appetite.
Euro losses have been somewhat limited, thanks to better economic news in the United States, especially with the jobs data. Additionally, recent eurozone data has been reasonably strong, especially with the recent ZEW readings. However, there is still plenty of downside potential for the euro going forward, especially if the Greek debt problem isn’t resolved. There is still plenty of weakness for the euro, though, and enough uncertainty that the euro is wavering. It will be interesting to see if the eurozone problems are resolved.
At 16:36 GMT EUR/USD is down to 1.2933 from the open at 1.2968. EUR/GBP is down to 0.8327 from the open at 0.8372. EUR/JPY is down to 99.5035 from 100.0150.
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