Euro holds steady despite greek concerns

Photo: TaxRebate.org.uk

The euro has held steady this week, despite concerns surrounding the Greek bailout crisis.

The single currency has weakened considerably in recent months, thanks to a range of factors, including the looming spectre of a Greek exit from the euro. Nonetheless, the euro appears to have been priced with the uncertainty taken into account, finds a poll from Reuters, which predicts the euro will remain at its current level of around $1.10 until the end of July.

40 of 46 analysts said the latest developments in Greece "have not altered their euro forecasts for the coming year".

The comments arrive as Greece defaulted on its IMF loan this week and prepares for a referendum on Sunday 5th July to decide whether the country should accept the latest EU proposals offered by its debtors.

"The Greek Referendum will drive headlines for the near-term," David Woo, FX and Rates Strategist at BofA-ML told Reuters, but added that the potential US interest rate hike would prove to be a bigger driver of the euro's strength than anything else.

There is still some uncertainty surrounding the US dollar, despite its strong growth in recent months against all other major currencies.

Unexpectedly low jobs figures released this week climbed by a smaller-than-expected 223,000, prompting experts to push back their expected date of a rate increase from September. As a result, the dollar fell against both the pound and euro.