The euro is under additional pressure on Monday with focus lying on the upcoming EU summit this week, where the fate of a European-led aid facility to Greece remains increasingly uncertain.
According to Deutchlandfunk over the weekend, German Chancellor Angela Merkel said she has made no decision on whether to support EU aid or to back an IMF solution for Greece.
The Chancellor warned of raising “false expectations” for a Greek solution at the March 25-26 EU Summit, pointing out that the issue isn’t on the agenda.
Reacting to the comments this morning, European Commission remains hopeful that an aid facility for Greece can be set up despite German opposition.
According to a statement released by the office of President Jose Manuel Barroso this morning, the President is “not disappointed” by comments made by German Chancellor Angela Merkel seeming to back away from aid to Greece over the weekend. Instead, the President says he remains hopeful that a solution can be agreed to in the coming days.
The EU summit is seen by traders as the key event where the fate of Greece will be decided. If an agreement to set up a facility is struck, expect the euro to regain some of its recent losses. On the other hand, failure for policymakers to reach an agreement could weaken the euro further.
The USD is broadly stronger on the back of the rising risk aversion, with Euro/USD down 0.16 cents to 1.3514, USD/CAD up 0.29 cents to 1.0202, USD/Yen up 0.04 points to 90.58, GBP/USD down 0.27 cents to 1.4986, and AUD/USD down 0.43 cents to 0.9111.
EUR/USD has traded in a range of 1.3498 to 1.3547 so far today. Short term support lies at 1.3500 and 1.3442. Resistance comes in at 1.3547 and 1.3586.
No comments:
Post a Comment