EUR/USD sees increased downside risks as Greece referendum nears – BTMU

FXStreet (Barcelona) – According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, the Greece referendum ahead and Grexit related risks pose downside risks for EUR/USD in the near-term.

Key Quotes

“Developments regarding Greece have escalated quickly and uncertainty is likely to remain elevated in the coming weeks and months. The increased likelihood of Greece defaulting and potentially exiting the euro-zone has increased downside risks for the euro in the near-term.”

“The most favourable outcome and more likely scenario would be for the public to vote in favour of the bail-out offer supporting the formation of a new government containing more pro-Europe parties which could come back to the negotiating table with Greece’s creditors. However, if the public vote against the bail-out offer the euro would likely come under even greater selling pressure as Greece would move closer to exiting the euro-zone.”

“The ECB’s continued provision of emergency liquidity assistance to Greek banks remains of key importance. We have been expecting the euro to weaken but driven primarily by tighter Fed policy rather than negative developments in the euro-zone.”

“The increased likelihood of Grexit will make the Fed more cautious about beginning to tighten policy.”

According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, the Greece referendum ahead and Grexit related risks pose downside risks for EUR/USD in the near-term.

(Market News Provided by FXstreet)