Back
21 Apr 2015
EUR/USD reaction to Greece limited, upside potential ahead – Growth Aces
FXStreet (Barcelona) - With Greece default risk rising and the Eurogroup meeting scheduled later for this week, the Growth Aces Research Team expects EUR/USD’s reaction to any Greece headlines to remain limited, and anticipates a daily close above 1.0700 to lead the pair to resume upside potential towards 1.1000.
Key Quotes
“The EUR is weaker across the board today, pressured by deepening worries that Greece could default on its debt and eventually exit the currency union.”
“Greece ordered state entities to park idle cash at the central bank in a scramble on Monday to pay its bills. Monday's legislative order includes local administration but excludes pension funds and some state-owned firms. Cash reserves that are needed by these bodies for their immediate payment needs are also excluded from the regulation.”
“Raising pressure on the government, local officials threatened to defy the decision, which needs parliamentary approval. Most opposition parties said the decision was arbitrary.”
“Greek Prime Minister Alexis Tsipras needs to present detailed plans to reform the economy before a meeting of euro zone finance ministers in Riga on April 24 to prevent a default which could trigger a Grexit. The next regular Eurogroup meeting is on May 11, just a day before the IMF requires a EUR 750 million loan repayment.”
“We have seen the EUR slip back after last week’s peak at 1.0850. However, the reaction to Greek problems is limited, which suggests that investors are do not want to buy USD after the recent string of weak U.S. economic data.”
“If the EUR/USD closed above 1.0700 today a move back towards the highs last week is still possible in the coming days with the potential for a rise towards our target of 1.1000.”
Key Quotes
“The EUR is weaker across the board today, pressured by deepening worries that Greece could default on its debt and eventually exit the currency union.”
“Greece ordered state entities to park idle cash at the central bank in a scramble on Monday to pay its bills. Monday's legislative order includes local administration but excludes pension funds and some state-owned firms. Cash reserves that are needed by these bodies for their immediate payment needs are also excluded from the regulation.”
“Raising pressure on the government, local officials threatened to defy the decision, which needs parliamentary approval. Most opposition parties said the decision was arbitrary.”
“Greek Prime Minister Alexis Tsipras needs to present detailed plans to reform the economy before a meeting of euro zone finance ministers in Riga on April 24 to prevent a default which could trigger a Grexit. The next regular Eurogroup meeting is on May 11, just a day before the IMF requires a EUR 750 million loan repayment.”
“We have seen the EUR slip back after last week’s peak at 1.0850. However, the reaction to Greek problems is limited, which suggests that investors are do not want to buy USD after the recent string of weak U.S. economic data.”
“If the EUR/USD closed above 1.0700 today a move back towards the highs last week is still possible in the coming days with the potential for a rise towards our target of 1.1000.”