Participant

Seeing a lot of debate in various articles as to whether a Greek exit from the Euro would be beneficial or not to the single currency?? My bet is it would strengthen the Euro not weaken it.
Greece is currently about to approve more spending, via higher pensions, higher minimum salary and rehiring 10 thousand or so state employees, add that it will also receive less cash as it has halted privatization of all state infrastructure and you have a country that must give a negative value to the Euro due to its unsustainable debt. If you look at the EUR/USD day chart you can see that the day after the Greek elections the Euro rallies and has not seen those levels since. Bearing in mind that the winning party had made its intentions well known and that the risk of exiting the Euro could only increase if that party won, it would seem the markets also favour a Greek exit for the Euro.
eur

 
Participant

Yes you are absolutely correct. I think any decision one way or another will be good for the euro though. Main issue now is lack of certainty about what the future will hold and that is holding down eurusd. I agree on value the euro is going to get weaker longer term. But we should see a pop upwards on a technical rebound as there are still a lot who are short euro and they will have to take profit sooner or later. Greece is a weak economy and without it for sure euro is stronger. But then what’s to happen with Spain, Portugal Italy? They also have massive debt problem and when the market sees that one can fall, the chance of others going down same exit route has to be there. just a thought. nice post btw.

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