Talking Points:
• Frequent recessions, excessively high unemployment and a large debt load are Greek burdens
• However, the real risk to the country and the Euro is a financial crisis
• A liquidity crisis can occur in Greece without the Troika's influence
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The Euro has tumbled on the sharp move towards accommodation from the ECB. While a dovish policy trend from the central bank will keep the pressure on the currency, another round of panicked selling behind the currency is unlikely to occur on a monetary policy basis. Rather, it is likely to come through financial trouble. And, Greece is staring at imminent trouble. The country's leaders are scrambling to come up with reforms that would open up funds from its creditors to offer a medium-term chance to pay down its debts while also supporting growth. However, the risk may be more severe and imminent than many expect. A financial crisis may explode before officials come up with a solution. We discuss the risk Greece poses to the Euro and what to watch in today's Strategy Video.
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