The ministers of the Eurogroup have reached a deal for a 4 month extension for the Greek bailout. This includes no new austerity one on hand but no new measures on the other side. It also requires a Greek document ready by Monday in which more details are provided.
Germany and Greece are beginning to claim victory. For EUR/USD, it means some relief that could likely lead to a temporary rise, before monetary policy divergence weighs on the pair. And, the Greek crisis is probably far from being over, it just enters a spring break.
Earlier, EUR/USD shot higher above resistance. It seems to settle there as markets draw to a close.
A press conference is set to provide some more details, but the mere fact that a deal has been reached is the most important part.
Dutch finance minister Dijsselbloem speaks
- Flexibility in the program.
- A successful review will allow disbursing of funds.
- The request for extending the program required conditions from Greece.
- Firm commitment to refrain from rolling back actions.
- Greece honors financial obligations and debt sustainability.
- The institutions will take the economic circumstances into account with the primary surplus. No new number for the primary surprlus
- A first list of reform measures based on the current arrangements on Monday.
- The institutions will then provide if this is sufficiently comprehensive for a successful completion of the review.
- This will enhance decisions.
- Further specification will be done by the end of April.
- Next week, national procedures will be launched for approving the extension by the end of February.
- This is a very positive outcome.
EU’s Moscovici talking now.
- Confident in a positive outcome
- If the Greek proposals are good Monday, we will proceed and approve and this will be the final stage for the extension.
- We will then continue working on the substance of the policies.
- Measures to include sound policies are needed.
- The Greek tax administration must be more effective.
- Social fairness is also necessary.
- Good faith is a major issue there.
- However, there is also a sense of urgency.
- We have shown our efforts.
- Trust is necessary.
IMF chief Christine Lagarde talks now:
- Dijsselbloem has put a lot of energy here.
- Every part is important i the statement.
- The IMF continues in its supervisory role.
- Very constructive process.
- End of April: final list of reforms to be agreed upon.
- After a delivery, disbursements can be made.
- We all have to pay attention to the financial point of view.
OK, there’s nothing new anymore. Here is more information and have a great weekend:
More: 3 bearish EUR/USD scenarios for 3 Different Greek Outcomes – Goldman Sachs
EUR/USD spike
Here is the chart, which already shows the spike higher. 1.1373 is a critical line that served as a separator of ranges:
In this week’s podcast, we cover Questions for traders, State of Fed, Greek crisis, oil, gold and GBP
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