Greek Bailout is Unlikely
Euro News – Greek Bailout Unlikely as Country’s Deepening Financial Crises Continues
The Euro, which has pared the overnight advance to 1.3046, is likely to face even more near-term headwinds in light of the continuing Greek financial crises. The ECB, European Union and the IMF (Troika), will re-assess Greece’s financial commitments in a week’s time, within which the 11.6B austerity programme – which many feel will not be enough -will remain under review. On the other hand, recent news that Greece may plan on introducing additional taxes is thought could raise an additional 2B in EUR.
Online forex traders will want to take note that President Axel Weber, former president of Bundesbank, has expressed concerns that the ECB may only simply be buying time with the non-standard measures, rather than resolving the crises head-on. Meanwhile, pressure on the Governing Council to expand its policies looks likely to increase, particularly as governments operating solely on the EUR become increasingly dependent on financial support.
The current state of the Greek economy continues its downward trend, having a damaging effect on the EUR. In light of Greece failing to secure its next ECB bailout, this downward trend is likely to continue.
As the Eurozone faces an ever deepening recession, President of the European Central Bank, Marion Draghi, could be expected to further reduce the benchmark interest rate. Forecasts for the EURUSD, meanwhile, will continue to look bleak, and forex traders will likely want to capitalise on the RSI’s current downward trend in their trading strategy.