The euro dropped today as traders felt unconvinced by rumors about probable extension of the Greek loan terms. The currency erased yesterday’s rally versus the US dollar but not against yen as the gains versus the Japanese currency were simply too big.
Greece asked to extend its loan for six months but without the austerity measures that were demanded by the previous bailout program. Greek Finance Minister Yanis Varoufakis said:
We should extend the credit programme by a few months to have enough stability so that we can negotiate a new agreement between Greece and Europe.
The current decline of the euro suggests that market participants do not believe that the proposal will solve the problems of Greece.
EUR/USD dropped from 1.1410 to 1.1341 as of 18:14 GMT today. EUR/JPY declined from 136.02 to 135.22 after rallying from 134.52 to 136.04 during the previous trading session.
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