The uncertainty over Greece was seen affecting euro’s market movements on Wednesday and the currency was seen hovering close to its two-month low position. The release of German economic sentiment data is also said to be contributed in weakening euro’s market position. The data highlighted the pain that the stronger European economies are undergoing because of the prolonged debt crisis in the Euro zone.
On Wednesday, the euro marked a growth of just 0.1 percent reaching to $1.2715, which is much closer to its two-month low of $1.2661. The German ZEW survey is being considered the currency’s two-month low as recorded on Tuesday.
However, a lump sum transfer idea for Greece brings in a much needed support to the euro. The support to the currency lies at its 90-day moving average as close to $1.2667. However, the currency gets more support on the Ichimoku chart, which is closer to $1.2653. The currency garners much of its support with the expectation that international lenders will extend financial aid to the ailing Greek economy.
A German newspaper revealed that Germany was planning to extend an aid of single payment to Greece which could be to the tune of 44 billion euros. However, the Finance Minister of Germany, Wolfgang Schaeuble put an end to the speculation by revealing that the proposal was still under considerations and it’s yet to be finalized. The Minister’s revelation, however, put an end to all positive sentiments that the market was getting regarding the Greece’s economic resurrection.
However, many market analysts feel that an encouraging result with respect to the Greek economic resurgence is difficult to expect until the international lenders reach a broader agreement with the euro zone policymakers. This becomes specifically important when there is a significant difference in opinion between the euro zone policymakers and the International Monetary Fund. This difference in opinion is being seen as a major roadblock in bringing down the Greek debt as a long-term target.
Currency analysts feel that the market is presently focusing on the Greek deal with great curiosity and any positive move towards bringing down the Greek debt will make the currency to rise in the market.
Meanwhile a meeting of 17 nations from the Eurogroup will take place on 20th November. Experts feel that the meeting may bring in more negotiations to stabilize the Greek ailing economy, and all market players are eagerly waiting for the meeting and its outcome.
However, many currency traders feel that the euro could see a significant jump in the near-term, if the currency breaks above $1.2740. According to them, such a jump may inspire short-term speculators to place more bets on the euro.
On the other hand, the euro’s debacle helped strengthen the dollar index. Consequently, the dollar index reached at 81.047 on Tuesday, which is much nearer to the currency’s two-month high of 81.241. Because of the huge liquidity of the dollar, the currency remained a hot favorite among the investors, whereas the euro is struggling hard to stabilize its market position.