Euro Holds Gains as Greek Doubts Linger

By: Barbara Zigah

Following Thursday’s announcement that Greece has finally agreed to the necessary reforms which will allow it to proceed with a second bailout loan, the Euro continues to tenuously cling to recent gains. However, the newest wrinkle is growing doubt that Greece will be able to meet the harsh demands required of it. As reported at 11:28 a.m. (JST) in Tokyo the Euro was trading at 1.3275, just off the 2-month peak of $1.3322 struck during overnight trading. It hit resistance at $1.3330, the 100-day moving average, and has been unable to break through that level in more than three months. As analysts had earlier suggested, the Greek agreement had already been priced into the market so the actualization of it had little effect on the currency pair.

Eurozone finance ministers meeting in Brussels will continue to work through the myriad of problems which are facing the Eurozone. The bailout loan for Greece is not yet a done deal as at the very least, several parliaments must agree to it as it is possible that both Germany and Finland may put up some resistance.

Also yesterday, the ECB announced no changes to the current monetary policy, but said that the next LTRO operation would have less stringent criteria suggesting that it may be even more popular than the last offering.