Does the now-approved Greek austerity plan mean an end to euro currency problems?
*MarketWatch, by Deborah Levine & William L. Watts, June 29, 2011:
''The euro rose to its highest level in two weeks against the dollar
on Wednesday, after Greece's parliament approved an austerity plan
deemed necessary to allow the debt-strapped country avoid default.
The euro erased most of its gains immediately after the vote as traders
had built in expectations of the plan passing, so were reversing those
bets ahead of another Greek vote Thursday on how to implement the
measures.
'Today's vote keeps the situation from falling into the abyss, but it
is not clear how far from it the situation remains,' said Marc
Chandler, global head of currency strategy at Brown Brothers Harriman.
The euro rose as high as $1.4448, then dipped to $1.4418 in recent
action. It's still up from $1.4366 in late North American trading
on Tuesday.
The dollar index, which measures the performance of the U.S. unit
against a basket of six currencies, pared its decline to 74.724 from
75.059 late Tuesday. It had fallen to 74.651 before the vote.
Against the Japanese yen, the euro turned back up by 0.2% to buy 116.67
yen. The single currency extended gains to 0.8% versus the Swiss
franc and was little changed compared to the British pound.
Greek Prime Minister George Papandreou on Wednesday secured the votes
needed in parliament to approve a 78 billion euro ($112.2 billion)
package of additional austerity measures and asset sales, while police
clashed with protesters in central Athens.
European stock markets also pared gains after the vote and short-term
Treasury prices gained, pushing yields lower -- both indicating a
reversal of investors' expectations for the plan passing.
'Some profit-taking was to be expected given how broadly anticipated
the 'yes' vote was,' said Michael Woolfolk, senior currency strategist
at Bank of New York Mellon. However, 'without popular support for
these austerity measures or any indication of how Greece will pay for
these measures in the long-term, it is unlikely that this vote reflects
an important outcome -- let alone a final outcome.' ''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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