Euro Falls Ahead Of EU Summit On Greece
07 July 2015 - 07:21PM
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The euro weakened against the other major currencies in the
early European session on Tuesday, as sentiment dampened ahead of
the emergency Eurozone leaders'summit on Greece crisis, scheduled
for later today. The outcome of the Greek referendum is very
regrettable for the future of Greece as it made discussions with
its creditors more difficult, Eurogroup chief Jeroen Dijsselbloem
told reporters on Monday. However, he said that keeping Greece in
the euro zone is still their objective.
Greece prepares to present new proposals to its international
creditors, as leaders of France and Germany have asked Greece to
come up with serious proposals at the Eurozone summit in order to
restart financial aid talks. Separately, International Monetary
Fund chief Christine Lagarde said that the global lender stands
ready to assist Greece if requested to do so.
Meanwhile, contagion fears may ease a little bit after the
Governing Council of the European Central Bank maintained its
stance on emergency funding to Greek banks. However, the ECB said
it would raise the haircuts on Greek bank collateral, most of which
is made of Greek government bonds. The move could make it difficult
for the country's banks to access ELA funds in future. Greek banks
will remain shut until at least Thursday, with limits on daily
withdrawals unchanged, officials said.
The Grexit fear raised after Greek voters rejected austerity
measures proposed by the country's international creditors in a
weekend referendum.
Meanwhile, the European share market also traded lower. The
U.K.'s FTSE 100 index is currently down 0.28 percent or 18.47
points at 6,517, France's CAC 40 index is down 0.30 percent or
14.35 points at 4,697 and Germany's DAX is down 0.26 percent or
27.32 points at 10,862.
In other economic news, data from Destatis showed that Germany's
industrial production remained unchanged in May from the prior
month. Production was forecast to rise 0.1 percent after expanding
0.6 percent in April, which was revised down from 0.9 percent. In
the early European session, the euro slid to an 8-day low of 1.0957
against the U.S. dollar, from an early high of 1.1057. On the
downside, 1.07 is seen as the next support level for the euro.
The euro fell to 0.7059 against the pound, 134.80 against the
yen and 1.0396 against the Swiss franc, from early highs of 0.7089,
135.66 and 1.0427, respectively. If the euro extends its downtrend,
it is likely to find support around 0.68 against the pound, 130.00
against the yen and 1.02 against the franc.
Against the Canadian dollar, the euro edged down to 1.3935 from
an early high of 1.3988. The euro may test support near the 1.34
region.
Looking ahead, Canada and U.S. trade balance, both for May and
U.K. NIESR GDP estimate for June are scheduled to be released in
the New York session.
Eurozone finance ministers are due to meet to discuss Greece
later in the day.
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