Greek Pension Reforms Hurt EUR

The euro slipped against the dollar o n T hursday after a Greek court ruled the country’s pension reform demanded by foreign lenders may be unconstitutional, stoking worries about Athens’ ability to implement austerity measures needed to secure aid.

The common currency had earlier climbed near $1.30 after encouraging U.S. economic data, which came a day before the all-important U.S. monthly payrolls report, boosted equity prices and risk appetite.

The Court of Auditors in Greece, which vets Greek laws before they are submitted to parliament, said measures such as increasing the retirement age by two years to 67 and cutting pensions by between 5 and 10 percent could be against the constitution.

“The euro sold off a little on that,” said Fabian Eliasson, vice president of currency sales at Mizuho Corporate Bank in New York. “It seems to be more difficult to implement” the austerity measures, he said.

The euro fell 0.2 percent to $1.2938, after having earlier risen to a session high of $1.2982 on Reuters data. It remained higher against the yen and was up 0.3 percent at 103.71 yen.

Some traders said selling in the euro against sterling also contributed to weakness in the euro/dollar pair. The euro fell 0.2 percent to 80.19 pence.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell