Euro is heading higher for now, gaining ground against its major counterparts. After a great deal of political theater, a bailout deal has been reached with Greece, and there is news that euro-denominated emerging market issuance is heading it its highest level in a decade. All of this is points to a calm for the euro, but it may not last long.
Right now, the euro is experiencing a degree of calm. After talking with German Chancellor Angela Merkel last week, Greek policymakers finally agreed to terms that would extend the bailout by four months. Even though some of the terms are not what the new Greek government would like, there wasn’t any leverage on the side of Greece. So, for now, the eurozone remains intact.
Another interesting development is the fact that emerging market sovereign issuance is on the rise. Thanks to quantitative easing in the eurozone, euro-denominated emerging market issuance is at a level not seen in 10 years.
However, the euro’s gains might be short-lived. Many expect to see the eurozone on the brink of crisis again in four months when the current Greek extension ends.
At 11:45 GMT EUR/USD is up to 1.1232 from the open at 1.1199. EUR/GBP is up to 0.7286 from the open at 0.7270. EUR/JPY is up to 134.0310 from the open at 133.8130.
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