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EURO FACES DOWNWARD TREND AS GREEK PAY DAY COMES

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EURO FACES DOWNWARD TREND AS GREEK PAY DAY COMES

April 9 2015, 10.48am GMT

STOCK.com

EURUSD falls as Greece is set to repay loans of close to €0.5 billion Thursday.

EURUSD has fallen 2.6% this week as Greece prepares to repay close to half a billion euros back to its debtors, the IMF, ECB and EU. On Wednesday the IMF issued a demand to the Bank of Greece for €459 million as the next installment of the total debt of €240 billion that the Hellenic country has borrowed since 2010.

Reports note that Greece raised €1.1 billion on Wednesday from selling 6-month bonds, which has given the lenders and markets confidence that Greece will meet the immediate debt. The Guardian also reported IMF chief Christine Lagarde as saying on Sunday that, ‘Greek finance minister Yanis Varoufakis had pledged to make the payment on time.’

However, to unlock another €7.2 billion from the IMF in emergency liquidity, Greece will have to comply by austerity rules, and for Greek prime minister Alexis Tsipras, whose voting mandate was built on non-austerity measures, this will be difficult to sell to the Greek population.

In the meantime, left-wing Tsipras has met with Russian president Vladimir Putin to discuss how the two countries can ‘restart and revive’ relations under present sanction conditions. Sanctions are currently levied by both sides, with the EU against Russia due to Ukrainian military action, and from Russia against EU countries in retaliation. Both Putin and Tsipras dismissed any reports of Russian aid for Greece’s debt and any breakaway on Greece’s part from EU policies.

The euro is also reacting to economic data from Germany on Thursday. Both imports and exports rose above expectations but the country’s trade balance for February was lower than forecast at €19.7 billion versus an anticipated €20.1 billion and a previous figure of €19.6 billion. German Industrial Production for the month of February was more positive for the euro at 0.2% above the previous figure of -0.4% but equal to expectations.                        

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