Forex News: Rehn says Chance of Grexit has Virtually Disappeared
Following the EUR/USD rise to a new 11-month high in last Friday’s session, Euro traders must ask themselves before placing their next trade if they believe they are watching a real recovery in the Euro-zone.
EU Economic and Monetary Affairs Commissioner Olli Rehn seemed bullish on his outlook for the Euro-zone economy when he said that the chance of a Greece exit from the Euro has virtually disappeared. Rehn further said that a single bank supervisor is a top priority and it goes hand in hand with a resolution to the debt crisis. Finally, the EU Commissioner said the EU needs to maintain the pace of reform to rebalance the economy. Rehn’s comments gave the Euro a twenty point boost to 1.3458 against USD.
Rehn’s sentiment seemed to fall in line with recent comments by ECB President Draghi, who said the darkest clouds over the Euro-zone have receded because of decisive policy. The ECB predicts a recovery later in 2013.
However, struggling economies like Greece are still not out of the woods. Greece unemployment remains at an historical high of 26.8%, and just today many Greek workers said they will be going on strike later this week. Farmers, doctors, and sea workers are all gearing up for strikes in protest of recent government reforms and cutbacks.
In economic releases, the German GFK consumer confidence survey rose to 5.8 for Ferbruary, possibly supporting the prospect of the German economy recovering along with a predicted recovery in the rest of the Euro-zone. On a worse note, Spanish retail sales dropped 10.2% in December from December 2011.
The Euro continues to trade around 1.3450 against the US Dollar in Forex markets at the time of this writing. EUR/USD set a new 11-month high in Forex trading on Friday at 1.3479, which may now provide resistance. Support may be provided by a broken resistance level around 1.3380.
EURUSD Daily: January 29, 2013
Chart created by Benjamin Spier using Marketscope 2.0
--- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.