The Greenback is trading mixed at the mid-session. The Euro and the British Pound are the two weakest currencies, down .29% and .37% respectively.
The Greenback is trading mixed at the mid-session. The Euro and the British Pound are the two weakest currencies, down .29% and .37% respectively. The Dollar is trading better versus commodity-linked currencies.
The EUR USD is trading lower at the mid-session as speculation continues to grow that Greece Prime Minister Papadreou is likely to leave this week’s European Union summit on March 25th and 26th without a financial aid deal. This means Greece will turn to the International Monetary Fund for aid if needed. This is negative to the Euro because it makes Europe appear weak for allowing one of its members to go out of the EU to seek financial help. Even if Greece gets the money it doesn’t mean instant success for the Euro.
European Central Bank President Trichet didn’t help matters much earlier in the session when he offered comments citing his belief that Greece should not be offered low-interest financing. There is no question that Trichet wants stronger terms. He backed his stance by saying, “There shouldn’t be any subsidy element, no concessionary element.” His thoughts were in line with German Chancellor Merkel who is pushing for similar austere measures and sanctions against nations that threaten agreed upon deficit limits.
The Euro attempted to test the old main bottom at 1.3440, but stopped after it ran out of selling pressure at 1.3475. Traders seem a little reluctant to press the short-side at current levels out of fear of a possible short-covering rally.
What is becoming clear is that battle lines are being drawn between Greece and the European Union and its beginning to look like Greece will have to turn to the IMF for financial aid.