The Greek government always wanted a solution that would last for a longer period, in order to get rid of uncertainty. Also markets don’t like uncertainty. Nevertheless, it seems that Merkel has made a gesture in regards to the components of the deal, but the length is problematic.
EUR/USD is slipping towards the lower end of the tight range.
Update:Â EUR/USD hits weekly lows as Greece rejects short term extension
- Merkel says that they have taken a step towards Greece and she is expecting a similar step.
- Differences are said to be minimal, with a resolution on pensions and tiny differences on VAT.
- The extension is worth 15.5 billion euros that would come from ECB profits on Greek bonds among other sources.
- In the meantime, Greece has reported that bank deposits have reached an 11 year low in May.
- Tough talk is heard from Greek PM Alexis Tsipras and also from German finance minister Wolfgang Schaeuble.
- It seems that Greece doesn’t like this proposal.
- US Treasury Secretary Jack Lew has expressed concern about the crisis. Everybody seems worried.
All in all, Merkel took a step towards Greece on pensions and VAT, but not on debt relief and the time-frame.
More:
- 3 EUR Scenarios Our Greek Playbook – Morgan Stanley
- Greek crisis: Forex Brokers want to avoid another SNBomb
EUR/USD is trading around 1.1174, down from “hugging†the 1.12 level. Support awaits at 1.1150 and resistance at 1.1290, but ranges are very narrow of late.
Here is how it looks on the chart:
In our latest podcast, we discuss building on the US recovery, the Greek crisis and EUR, Saudi solar and next week’s events.
Follow us on Sticher.
