The Currency Traders Don’t Care About Greece

Currency traders have grown tired of Greece’s Sisyphus routine.

For those who are unfamiliar with Greek mythology, Sisyphus was a king who was condemned to repeatedly push a boulder up a hill, only to have it roll back to the bottom every time he neared the top. He was condemned to do this over and over again, for eternity.

The analogy to the negotiations between Greece and its creditors is easy to spot.

The Wall Street Journal reported on Thursday that International Monetary Fund officials, frustrated by a lack of progress, abruptly ended negotiations with their Greek counterparts in Brussels. How did the euro react?

It didn’t.

The shared currency barely reacted when the news broke at 10:30 a.m. Eastern.

Greece has had little impact on the euro-dollar trade in recent months. Instead, strategists say, European bond yields have been the guiding force behind the euro-dollar trade.

Currency pairs are heavily influenced by fluctuations in sovereign bond yields, and over the pastfew months, the German bund appears to be driving trade in both Treasurys, and by extension, the euro-dollar pair.

Market Watch

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.