Greek referendum: Most scenarios to be EUR negative – BNP Paribas

FXStreet (Bali) – The outcome of the Greek referendum will dominate FX markets early next week, notes Daniel Katzive and Vassili Serebriako, FX Strategists at BNP Paribas, adding that most scenarios are expected to be EUR negative.

Key Quotes

“In Europe, markets will be preoccupied by the after effects of the Greek referendum to be held over the weekend. We continue to think the current period of elevated uncertainty is more likely to be supportive rather than detrimental for the EUR as elevated FX volatility is likely deterring eurozone investors from adding to international portfolios and discouraging the rebuilding of EUR-funded carry trades.”

“At the same time, the possibility of a successful negotiated solution being announced at any time makes more speculative market participants wary of building EUR shorts geared to renewed EMU existential concerns. We continue to look for a resolution of the current impasse to clear the way for a resumption of broad EUR weakness, as suggested by real rate differentials.”

The outcome of the Greek referendum will dominate FX markets early next week, notes Daniel Katzive and Vassili Serebriako, FX Strategists at BNP Paribas, adding that most scenarios are expected to be EUR negative.

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