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16 Jul 2015
Good news Greece, so why bad news euro?
FXStreet (Barcelona) - Analysts at The Bank of Tokyo-Mitsubishi UFJ, Ltd. explained that the euro is coming back under downward pressure against the US dollar after breaking below support at 1.1000-level which has been the bottom of its recent trading range.
Key Quotes:
"The agreement in principle to provide another bail-out for Greece has prompted an improvement in global investor risk sentiment weighing on the euro. Conditions are now more favourable for euro weakening capital outflows from the euro-zone."
"Euro-area finance ministers have reportedly agreed to provide a shortterm bridge loan to Greece in the week ahead allowing it not to miss a EUR3.5 billion repayment due to the ECB on the 20th July which will keep alive emergency liquidity assistance for Greek banks."
"The ECB has also started to increase emergency liquidity assistance again. The reduced risk of a negative shock from Greece in the near-term makes it more likely that the Fed will feel more comfortable about raising rates this year."
"Investor expectations for a further widening in policy divergence between the Fed and ECB continue to weigh heavily on EUR/USD. Fed Chair Yellen signalled in her semi-annual testimony that the Fed remains on course to raise rates this year providing support for the US dollar."
Key Quotes:
"The agreement in principle to provide another bail-out for Greece has prompted an improvement in global investor risk sentiment weighing on the euro. Conditions are now more favourable for euro weakening capital outflows from the euro-zone."
"Euro-area finance ministers have reportedly agreed to provide a shortterm bridge loan to Greece in the week ahead allowing it not to miss a EUR3.5 billion repayment due to the ECB on the 20th July which will keep alive emergency liquidity assistance for Greek banks."
"The ECB has also started to increase emergency liquidity assistance again. The reduced risk of a negative shock from Greece in the near-term makes it more likely that the Fed will feel more comfortable about raising rates this year."
"Investor expectations for a further widening in policy divergence between the Fed and ECB continue to weigh heavily on EUR/USD. Fed Chair Yellen signalled in her semi-annual testimony that the Fed remains on course to raise rates this year providing support for the US dollar."