The Euro recovered some of Wednesday’s losses which followed the European Central Bank’s announcement that it would not accept Greece’s sovereign bonds in exchange for funding. That was a surprise to analysts and investors alike, and means essentially that Greece’s central bank would have to liquidate its emergency reserve of Euros in order to repay its lenders. Analysts believe that the latest round of talks between the ECB chief, Mario Draghi, and the Greek Finance Minister, Yanis Varoufakis, did not go in Greece’s favor.
As reported at 9:04 am (GMT) in London, the EUR/USD recovered to $1.1366, a gain of 0.3% from late trade in New York and off the earlier low of $1.1304 during the Asian session. The EUR/JPY was also up 0.3% in London trade, steadying at 133.44 Yen, but is also off Wednesday’s 2-week peak at 135.35 Yen.
German Data Gives Euro Brief Support
The Euro got a boost from unexpectedly strong German data, but analysts believe that the common currency will remain under pressure until there is some resolution to the Greek problem. Besides Greece, the likely policy divergence between the ECB and the US, and perhaps the UK if their central bank decides to tighten later this year, are what is keep the Euro’s gains limited.