The euro rebounded against the U.S. dollar after Greece announced that it’s going to activate the rescue package, provided by the European Union and the International Monetary Fund, to deal with the nation’s budget shortage and pay its debts.
The yield on the Greek 10-year bonds dropped 0.8 percentage point to 8.17 percent. The current situation with the Greece’s budget deficit tests the reliability of the euro as the reserve currency. And while at the present time the concern for the euro’s strength somewhat eased, in the long term the Greece’s decision to accept the bailout from the EU and the IMF may prove disastrous to the euro’s performance.
EUR/USD traded at about 1.3312 as of 12:16 GMT today after opening at 1.3293.
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