Euro dips as Greece bailout not finalised

The euro dropped from a two-month high today after Greece stopped short of signing a deal on austerity measures, but hopes that a deal can be agreed soon limited the damages, according to Reuters.

Lucas Papademos, the Greek prime minister, said that political leaders in Greece have agreed on every point of a bailout package bar one, on which discussions with the nation’s international lenders will continue. Greek party officials revealed that the levels of reductions in pensions was the sticking point but that talks with its lenders would continue so that a deal could be agreed before eurozone finance ministers meet on Thursday.

The euro dropped to $1.3215 from late New York’s $1.3260 and on the back of its two-month high of $1.32890 reached on Wednesday before clawing back some ground to hit $1.3253. It has gained almost five per cent from its 17-month low in January of $1.2624 as the market has acted on the hopes of Greece wrapping up its second bailout agreement with international lenders.

However, immediate resistance is seen in its 90-day average of $1.3321 and its 100-day moving average of $1.33332. Market players claimed that any deal was expected to only offer the euro a short-term boost due to continuing uncertainties over Greece and other economies within the eurozone.