Euro Broadly Weaker on Greek Worries

10 May 2012 9:39:00 AM


The Euro continues to hold close to a multi-months low versus the U.S. Dollar held there by Greece’s political deadlock. Talk of Greece leaving the Eurozone is rife once again, as without some cohesion and agreement from the government the country will be unable to obtain its next E.U./IMF tranche loan and risks bankruptcy as maturing debt obligations become due.

Greece’s inability to form a coalition government, despite several attempts, could result in another election. Analysts say that will either make or break the Greek nation in terms of its continuance as a Eurozone member state as international lenders have refused to renegotiate the existing terms of the rescue fund.

One analyst expects that the Euro will have a new range as a result, well below the $1.30 level; as reported at 12:42 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2943, but had earlier slipped to $1.29115 only a few pips from the low of 1.2910 that was struck on Wednesday. The Euro was also lower against the Pound Sterling, trading at 80.03 and is within a few pips of a 3+ year low. The Euro has continued to be resilient over the past several months, and speculation that the ECB could step in with another long term funding operations could provide the Euro with another bounce.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.

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