EUR Falls on Greece Debt Concerns as USD Rebounds

The euro slumped against the dollar on Monday on worries over whether Greece would secure aid before it runs out of cash in three weeks, while the greenback gained versus other currencies on the view the Federal Reserve will raise U.S. interest rates this year.

Athens sounded upbeat about talks with its creditors to release funds from its 240-billion-euro aid package while Germany called for a more detailed list of reforms.

Concerns about the negotiations were mitigated by encouraging European data. A report showed confidence in the euro zone economy rose to its highest since July 2011 and a positive reading on German inflation raised hopes the region would avert deflation.

The euro remains under pressure from the diverging policy paths of the Fed and the European Central Bank, supporting the notion it would fall to parity with the dollar this year, analysts said.

“That’s a pretty strong headwind for the euro,” said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.

via CNBC

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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