Euro remains vulnerable as Greece woes persist

Euro remains vulnerable as Greece woes persist

Greek national flag and a European Union flag flutter outside the Greek embassy in BrusselsThe euro remained vulnerable for a third straight session on Tuesday amid doubts Greece will succeed to unlock a €7.2 billion aid installment needed to repay debts maturing this month.

Greece may lose the support of the International Monetary Fund unless European leaders write off a “significant” amount of Athens’ sovereign debt, the IMF warned Greece’s creditors, the Financial Times mentioned in a report on Monday.

Negotiations with European officials will continue as Greek Deputy Prime Minister Yannis Dragasakis meets European Central Bank President Mario Draghi on Tuesday.

At the meantime, investors are worried Greece may not be able to reach a deal with its creditors before May 11 eurogroup meeting.

While the European Commission raised growth forecasts for the 19-nation eurozone, it slashed the Greece’s forecast to 0.5% from 2.5% estimated in February.

Uncertainty in Greece “is taking a heavy toll on investment, which is also suffering from limited credit supply from the financial sector and a build-up of arrears from the public sector,” the Commission said.

The European single currency hit a low of $1.1065, yet it pared some of its losses to trade around $1.1122.

The EURUSD is currently trading near the session’s key support at 1.1103, while the key resistance is located at 1.1204.

The pair’s movement is likely to be affected by the U.S. nonfarm payrolls due on Friday, where an improvement may push the euro down further.

American employers added 231,000 jobs in April from 126,000 jobs in March, according to median forecasts.

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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