Week in FX Europe – EUR unfazed by Greek Debt and Budget Failure

The EUR defied all odds this week. With very high profile meetings of European leaders reaching no conclusions and EU manufacturing near 2009 lows it was hard to expect the EUR would be in the 1.2950–60 range. Chinese manufacturing expansion and the US holiday created a market where the EUR reached 3 week highs.

European politicians reached no accords, but made sure all talks will resume somewhere in the near future. There were no fallouts and no compromises which is what we have come to expect from these types of meetings. Economic indicators painted a different picture. Manufacturing continues to suffer in the UK and Europe. Business confidence continues to erode even in Germany the zone’s strongest economy.

France was warned that its AAA rating will be under review next year by Fitch. The France based rating agency is the only one giving it the highest investment grade as Moody’s and S&P downgraded the country earlier in the year.

Spain’s bond sale this week was a boost of confidence for the EUR as the yield on the bonds was 5.5% much lower than the precious 7 percent that was seen in July.

Greece continues to be the centre of debate as factions of Euro members are split on the way to help Greece without taking a haircut or extending the deadline. The IMF has recommended that Greek debt should be about 120% of GDP and a sustainable timeline to repay the debt would be 2022.





  • JPY Bank of Japan Releases Minutes
  • EUR Eurogroup Budget Meetings
  • EUR Greek Debt Agreement Summit
  • GBP Gross Domestic Product
  • USD Consumer Confidence
  • EUR German Consumer Price Index
  • CHF Gross Domestic Product
  • EUR German Unemployment Change
  • USD Gross Domestic Product
  • EUR Euro-Zone Unemployment Rate
  • CAD Gross Domestic Product

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza