Troika And Eurozone Partners

Forex News and Events: Considering the risk building in Europe, the EUR has held up surprisingly well. However, given the following headlines from Greece, we doubt how much longer the single currency can remain resilient. Conservative leader Samaras stated “I tried to form a coalition government with two goals: that the country remain in the euro and bailout policies change to include growth measures,” the lack of success after 6 hrs of talks in Athens means he will hand over the mandate back to the president. This also means that the attempt to form a government will now be passed to Alexis Tsipras, the head of Syriza, who has vowed to derail the current bailout path. Comments from Tsipras overnight has rattled the markets nerves as the Syriza leader Alex stated that he will annul the ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The Eurogroup was not impressed with the inter-party agreement from Athens and late after the Eurogroup meeting yesterday Greek PM Venizelos was sent back to Athens with demands for deeper cuts. It appears that the EU finance ministers are not prepared to sign off the deal until they get a stronger sense that Greece will actually push through with its pledges. Lawmakers there are supposed to vote on the new austerity measures over the weekend and an “implementation law” is supposed to be considered in the next 10-15 days, according to local sources. Eurogroup chair Juncker stated on Thursday that there is now another week for new cuts to be found and he hoped the Eurogroup would be able to sign off on the plans at a new meeting next ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The euro suffered overnight as fears over the situation in Greece have resurfaced. While the market is hoping for a clinching of a debt swap deal today with private sector creditors, securing cross-party support for further austerity measures and securing further funding from the troika is proving far more difficult. According to political leaders in Athens, the main parties have until noon today (local time) to respond to the troika’s demands, and so far there appears some distance between where the national unity government lies and the IMF’s targets. Talks continued late into the evening on Sunday and will resume today between the troika and the local authorities. Reports suggest that the main point of contention lies in private sector ...

FX Briefing Highlights Merkel and Sarkozy committed to keeping the EMU together ECB provides longer-term USD financing to credit institutions Growing international pressure on EMU states to take action Breathing Space for the Euro Starting from its low of 1.35 last Monday, EURUSD returned to almost 1.39 during the week. The euro has thus recovered somewhat from the weak spell that had mainly been caused by the resignation of ECB executive board member Jürgen Stark and by German economics minister Philipp Rösler “thinking out loud” about a Greek insolvency. There has been little change in the fundamentals in the mean time. No major economic indicators were published in the eurozone this week, and the data from the United States continue to paint a mixed picture. US ...