Though improving yields on US Treasuries are helping to support the US Dollar in the long term, in the short term the greenback remains under pressure as investors focus on the negotiations between Greece and its lenders. There is still a great deal of uncertainty among experts and investors as to whether the Greek government can avoid a financial meltdown. Analysts say that this week’s talks, which are taking place in Brussels, will be a decisive one for the Greek government. At the end of June, the current deal between Greece and the IMF and EU lenders is set to expire; analysts believe Greece may not be able to make payments unless a new deal is structured.
As reported at 10:05 am (BDT) in London, the EUR/USD was trading higher at $1.1307, a gain of 0.27% but far off today’s high set at $1.1384. The US Dollar Index, as a result, is lower, trading at 94.758 .DXY, a loss of 0.43%. The Index is comprised of a weighted basket of six major currencies, all of them peers of the greenback; the Euro is the largest component.
Greece’s Clock is Ticking
Though the current Greek loan expires on June 30th, beyond this week any potential program extension would need parliamentary approval from the E.U. members which would further delay a resolution. Last year, several E.U. member nations had balked at giving Greece further extensions and had to be persuaded to commit.