Home Fundamental Comment Euro drops as Greece says deal with eurogroup will be “difficult”
Euro drops as Greece says deal with eurogroup will be “difficult”

Euro drops as Greece says deal with eurogroup will be “difficult”

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europgroup meeting fxcomment May 11The euro dropped versus the U.S. dollar for a third straight session on Monday, as Greek Finance Minister said clinching a deal with the eurogroup in today’s meeting was unlikely.

“The likelihood is not ruled out. The message we are getting are that it will be difficult,” Finance Minister Yanis Varoufakis said on Monday.

Euro-area finance ministers have ruled out any deal with Greece on Monday, revealing that whatever happens during the meeting it will not be enough to prompt the ECB to raise the limit on short-term Treasury bills that Greek banks can purchase, a move that would help avert a Greek national bankruptcy.

European finance ministers meet one day before Greece has to repay a debt of 750 million euro to the IMF.

The situation still looks complicated, as the eurogroup are not in hurry to reach an accord with Greece, while the Greek government is still stock what it calls “red lines,” pointing to reforms including pension cuts and labor reforms than facilitate firing workers.

EURUSD

The EURUSD did not take advantage of the release of lower than forecast U.S. ADP employment and jobless claims figures, as well as mixed nonfarm payrolls data.

American employers added 223,000 jobs in April from a downwardly revised of 85,000 jobs in March. Analysts had predicted employers to create 228,000 jobs.

The pair is currently trading around 1.1165, near Fibo 23.6% support to the upside wave that had begun by mid-March.

The euro faced a sell-off after it hit a peak of 1.1390 on May 7, with investors focusing Greece’s debt dilemma.

The EURUSD pair did a downside correction, as indicated by the Stochastic Oscillator momentum indicator on the daily charts.

Next week, eyes will focus on the ECB monetary meeting and comments by President Mario Draghi on the euro area economy.

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Ahmed Mamdouh Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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