The Euro Reverses Course & Climbs
June 30, 2015
As the month comes to a close, so does another deadline for Greece. At midnight today, the official EU bailout program comes to an end along with any new provisions and negotiations. In other words the slate is wiped clean. With no promises of any support and no legal way to offer support Greece is essentially on their own. Before this deadline comes another important deadline will be reached. the deadline for Greece to pay the €1.6bn due to the International Monetary Fund is 6pm Washington DC time or 11pm BST.
Greece will not make the €1.6bn due to the International Monetary Fund on Tuesday, the Wall Street Journal is reporting:
Greece won’t make a debt repayment to the International Monetary Fund due Tuesday, a senior Greek government official said Monday. Earlier this month, Greece had notified the IMF it plans to bundle its loan repayments falling due this month into one payment of around 1.6 billion euros, which is due Tuesday. The IMF has said that Greece will immediately be in arrears if it fails to make the debt repayment.
In a turn of events, the euro plunged in the Asian session falling over 150 points to recover a bit as European markets opened, but then reversed course to end up 80 points at 1.1246. The greenback is trading in the red at 95.00 down 60 points after US pending home sales tumbled.
The European Commission chief, Jean-Claude Juncker, has said he feels “betrayed” by the “egotism” shown by Greece in failed debt talks.
He said Greek proposals were “delayed” or “deliberately altered” but added the door was still open to talks. Along with several other European leaders, he has urged a yes vote in the snap referendum called for Sunday.
The euro proved broadly resilient on Monday to Greece’s moving one step closer to an exit from the single currency, helped by intervention by the Swiss National Bank and investors concluding that the situation in Athens still has some way to run. But though the euro initially fell sharply in response, to as low as $1.0956 as investors displayed a “complete lack of panic” over Europe’s single currency, as Rabobank senior currency strategist Jane Foley put it.
Earlier, the Swiss franc, which tends to appreciate at times of market uncertainty, had traded at a four-week high of 1.0315 francs per euro. But it came off those highs as the Swiss National Bank said it intervened in the market to weaken it, and was last trading down at 1.0418 francs.