The lack of decision about Greek debt depreciated the EUR
The EUR started the week with reductions in their basic courses cross over concerns of new problems in the Eurozone again at Greece. Despite assurances that our southern neighbor is very close to an agreement with private creditors, both sides in the negotiations are still unable to agree on key issues. We recall that creditors are willing to forgo part of the debt, but against this compromise requires stringent budget cuts and reforms that Greece is willing to accept. At the same time, if the new rescue package from the European Union and International Monetary Fund worth 130 billion euros is not received, there is a real danger to the country insolvent. Meanwhile, Germany has asked Greece’s sovereignty over decisions related to taxes and spending to ensure tighter control over spending allocations. Thus Athens will be able to threaten more creditors with bankruptcy, but will have to accept additional spending cuts. The European Commission however rejected the proposal of Berlin and protect the Greek government. The lack of agreement and clarity about the Greek debt sent the euro at the day low of 1.3050 against the dollar during the Asian trading session.
The caution of market participants in respect of the single currency was the result of the upcoming auction of French government securities. Today’s second largest economy in the euro area plans to sell debt totaling 8.5 billion EUR. The USD increase its profits against the Japanese yen for the third consecutive session. The central bank of Japan said it would take appropriate action to protect the local economy from deflation and reduce the value of Japanese yen. The last bank intervened in late October, when the controlled devaluation of its currency.
Tags: EUR, Greek debt