Tuesday March 23, 2010 - 20:46:07 GMT
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Forex Hound - www.forexhound.com
Borrowing Money from IMF Guarantees Nothing for Euro
The Greenback is trading
mixed at the mid-session. The Euro and the British Pound are the two
weakest currencies, down .29% and .37% respectively. The Dollar is
trading better versus commodity-linked currencies.
The EUR USD is
trading lower at the mid-session as speculation continues to grow that
Greece Prime Minister Papadreou is likely to leave this weekâ€™s European
Union summit on March 25th and 26th without a financial aid deal. This
means Greece will turn to the International Monetary Fund for aid if
needed. This is negative to the Euro because it makes Europe appear
weak for allowing one of its members to go out of the EU to seek
financial help. Even if Greece gets the money it doesnâ€™t mean instant
success for the Euro.
European Central Bank President Trichet
didnâ€™t help matters much earlier in the session when he offered
comments citing his belief that Greece should not be offered
low-interest financing. There is no question that Trichet wants
stronger terms. He backed his stance by saying, â€śThere shouldnâ€™t be any
subsidy element, no concessionary element.â€ť His thoughts were in line
with German Chancellor Merkel who is pushing for similar austere
measures and sanctions against nations that threaten agreed upon
The Euro attempted to test the old main bottom at
1.3440, but stopped after it ran out of selling pressure at 1.3475.
Traders seem a little reluctant to press the short-side at current
levels out of fear of a possible short-covering rally.
becoming clear is that battle lines are being drawn between Greece and
the European Union and its beginning to look like Greece will have to
turn to the IMF for financial aid.
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