SUBSCRIBE TO FEEDEuro down in forex trading on U.S. GDP
Even though the European Central Bank has stated publicly that it is not planning to stage a dramatic rescue of Greece’s economy, quietly euro zone leaders are contemplating their options. Greece is not so unimportant that the euro zone is ready to lose the country.
GFT’s Boris Schlossberg has information on a possible euro zone plan, and reports in FX360 on the options on the table for Greece:
“Greece will not default. Please. In the euro area, the default does not exist,” Mr. Almunia told Bloomberg TV. Asked if there was any possibility Greece would leave the euro zone he said: “no chance.” Although Mr. Almunia stated publicly that there was no special European plan for Greece, privately European monetary and fiscal officials appear to be moving towards a consensus for some type of a rescue package for the Greek economy. Greek GDP comprises only 3% of total EZ output, but officials fear that the political cost of Greece’s exit from the European monetary union would be far greater than the economic numbers suggest. Officials worry that a default in Greek debt could trigger a domino effect for the possible exit of other southern European nations facing similar fiscal deficit problems.
The euro is already weakened in forex trading due to issues surrounding Greece, Portugal and other euro zone countries. The fact that U.S. GDP came in much higher than expected is not helping matters much, and the euro has now sunk through the 1.4000 mark and is struggling to find support at 1.3900.
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