Some positive headlines regarding a bank aid plan and a sudden acknowledgement from Greece that it actually has money until mid-November managed to overcome some negative headlines.
It allowed EUR/USD to make a significant comeback and return to just where it closed on Friday. Here are 7 highlights:
- Greece suddenly realized that it has money until mid-November, just after the troika decision was delayed to that period of time.
- The Financial Times reports that the EU is working on a plan to bailout the plans. Both headlines fit perfectly into the talks of a Greek default at the beginning of November, and a preparation till then.
- The French and Belgian governments and central banks pledged to back Dexia, declaring that deposits are safe.
- Italy was significantly downgraded by Moody’s – by 3 notches. The statement includes wording about further “substantial†downgrades on the way.
- S&P left Portugal’s credit rating unchanged, but the outlook remains negative.
- German chancellor Merkel warns of dangers of a Greek default.
- Ben Bernanke warns of the dangers of a disorderly Greek default.
The timetable is more flexible now that Greece can take its time until mid November. The focus returns to the banks.
EUR/USD fell as low as 1.3144, setting a new 8 month low, but bounced very nicely. 1.3360 serves as a strong cap – this is the area where the pair closed on Friday.
For more events, lines and everything EUR/USD, see the euro dollar forecast.
