Greek Tragedy Pulls Euro Down Again

The euro’s advance initiated by hopes that the EU would help Greece to end its fiscal crisis ended today after speculations that the topic will not be brought in the bloc’s summit tomorrow, declining confidence among traders that the Greek budget deficit’s pessimistic scenario is close to an end.

A German official announced that solutions for Greece’s growing budget deficit will not be proposed tomorrow, even if the subject may be discussed in the EU summit to be held this Thursday, forcing the single currency down versus several key-currencies after a rally in which the euro advanced specially versus the yen and the greenback yesterday. The dollar pared most of its losses from yesterday versus the Eurozone currency despite negative trade balance figures published today in the U.S., evidencing how traders are much more concerned with the events in Greece than with other normally relevant economic data.

Tomorrow’s EU summit, with or without Greece as its main topic will determine the euro prices for the next week, but as most traders consider the situation to be complicated and negative, even with an eventual ECB bailout, the euro is likely to remain down.

EUR/USD traded at 1.3699 as of 15:11 GMT from a previous rate of 1.3772 yesterday. EUR/JPY traded at 122.94 from 123.44.

If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.