Euro To Struggle After IMF Walks Out Of Greek Talks
Greek bailout concerns remain heightened despite the leaders of Greece, France and Germany agreeing to intensify negotiations over financial aid for the indebted country. The euro edged lower after the IMF pulled out of the Greece’s bailout talks, saying a deal was still far off after a five-month stalemate.
“There are still major differences between us in most key areas,” IMF spokesman Gerry Rice told reporters in Washington. “There has been no progress in narrowing these differences recently. Thus we are well away from an agreement.”
The fund said its Greek talks team had returned to Washington from Brussels and that the “ball is very much in Greece’s court right now”, adding key disagreements were on pensions, taxes and financing.
Greece must reach a compromise with its creditors — the IMF, European Commission and European Central Bank — before the end of the month to unlock much-needed cash to service its debts. Failure to do so will lead it to default and possibly exit the Eurozone.
The euro continued to trade in the red Friday morning to trade at 1.1255 down by 4 points as the greenback added 5 points to reach 95.02 recovering after US retail sales yesterday. There is little data due in the European session today leaving markets focused on comments regarding Greece. The euro is expected to struggle after the International Monetary Fund walked out of Greece’s debt reform talks, saying Athens was not doing enough to find a compromise with its creditors.
The yen fell against the dollar and the euro in Asia with dip buying kicking in to bring the greenback back from the lows caused by comments by the head of the Bank of Japan the previous day. A person close to the Japanese government suggested Thursday that Prime Minister Shinzo Abe’s administration was displeased with Gov. Haruhiko Kuroda’s comments, a remark that also helped nudge up the greenback. The USDJPY is trading at 123.45 as the yen eased by 3 points while the EURJPY gained two points to trade at 138.95. A government official requesting anonymity said the central bank chief wasn’t speaking for the Abe administration when he made the comments that sparked a sharp rise in the yen. Government officials generally view the finance ministry as having control of foreign-exchange policy and take a dim view of remarks by central bank officials that cause sharp fluctuations in the market.
The Australian dollar is slightly lower in spite of the U.S. dollar weakening in overnight trading following robust comments by Japan’s central bank governor. The Aussie is trading at 0.7750. The kiwi recovered some of yesterday’s losses after the RBNZ unexpectedly lowered its prime interest rate. The kiwi is holding at 0.7018.
REGISTER WITH OUR FORUM AND POST AT LEAST ONE MESSAGE TO GET FREE SIGNALS