On
Monday, EURUSD closed at 1.2949, 0.03% lower than Friday. Euro continues the
uptrend from its support level of around 1.2100 in late July. Greek 10-year
yields touched a new low since its last debt restructuring in March this year,
falling 47 basis points to 17.58%. The good news is that Greece may not fall
through the cracks after all. The latest reassurance comes from the German
Finance Minister Wolfgang Schaeuble, who categorically said, “I think, it will
not happen that there will be a state bankrupt in Greece.”
What
this means is that the policy makers may be charting out some new course for
the Greek recovery. Eyeballs are glued in the direction of Troika and the
upcoming European Council meeting on October 18-19 in Brussels. The across the
board plunge in government securities in the European Union, including the
benchmark German bonds, indicates returning investor confidence. While
developments on Spain’s front are still uncertain, Greece may get more time to
bring its house in order. With this, the possibility of a Grexit has also been
pushed away, at least for the time being. Speaking in Singapore, Schaeuble
said, “We do not see that there is any sense to speculate on Greece leaving the
euro. That would be very damaging for Greece and the euro.”
There
are also talks about a common European banking supervisory body in the German
quarters with multiple features to reduce financial risk in the market and aid
the ailing banks. If implemented, the system will bode well for the Eurozone nations
and Euro.
Eurion
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