FXStreet (Barcelona) – Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, notes that any Euro downside risks will increase significantly if situation regarding Greece escalates.
Key Quotes
“The longer it takes to reach an agreement, the greater the negative impact on the Greek economy and potential for negative spillovers across the euro-zone. While we do not expect Greece to leave the euro-zone, developments could escalate materially before an agreement is reached increasing the risk of a Grexident. The euro would likely come under increasing downward pressure bringing an end to its current period of consolidation.”
“Implied euro volatility remains elevated in the nearterm providing a signal that the spot rate could begin to move more sharply.”
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