Euro certainly volatile for long

Discussion about a Greek default is rising: “Given that the market has had plenty of time to prepare (or be prepared) then the question is whether it would be that much of a shock”, writes Gavin Grier-Rees, analyst at FXMR, pointing to a natural Euro sell-off in reaction, but that could be rapidly retraced by short covering, as “the market is too short”.

Adding to that is far eastern investors thinking “that a euro without Greece is likely more stable and hence stronger”, but in another hand, a Greek departure opens a precedent, which might increase volatility/uncertainty about the other peripherals future: “The problem is that Europe’s structural problems are not confined to Greece. They might well be the extreme example but the other peripherals each have similarities that place them at risk too”, adds Grier-Rees.

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