The euro started to reverse losses in early trading hours as fears of Grexit relax.
Greece submitted a list of reforms to the bailout institutions on Wednesday and in response traders took a bullish position on the euro versus the U.S dollar on Thursday. EURUSD rises to 1.08219 by 10.00am GMT.
Measures from Greece in the 26-page document are reported by the Financial Times to include a programme of crack-downs on tax evaders and fraudsters who, by Greece’s accounts, can increase revenues by €875m from offshore bank transfers, and €600m from a ‘a new lottery scheme aimed at compelling consumers to demand value added tax receipts.’
However, also in the document are reforms that will introduce major costs; €600 million to reinstate the ‘13th salary’ that is paid to pensioners; €326 million on reversing cuts on state pensions, plus a slow increase in minimum wage: Total bill is estimated at €1.1 billion.
The bailout since the Greece crisis has so far has cost the Eurozone €250 billion, with another €7.2 billion lifeline grant requested by the new SYRIZA government merely to meet loan repayments. The next repayment of €450 million is due on 9 April and Greece insists it can meet the debt.
Though this new list of reforms is generally seen as optimistic in keeping negotiations open between Greece and its EU partners, it still does not bear the detail required by the lending institutions – the European Commission, European Central Bank and International Monetary Fund – and so the agreement that is supposed to be reached next week on repayment schedules and further loans, will more likely be seen at the next meeting of Eurozone finance ministers on 24 April in Riga.
In the meantime, the greenback is weakening against the euro due to some poor expectations on U.S data being announced on Thursday and Friday with forecasts on both initial jobless claims and non-farm payrolls demonstrating the slowdown in the U.S labour market – one of the key factors of the economic growth plan initiated by the FED.
MT4 chart: EURUSD
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