The Euro managed to rebound against the U.S. dollar on Monday on optimism that a meeting of European finance ministers will give more insight into euro zone debt aid for the short term at least.
“Optimism about Greece is providing some support as European officials appear willing to approve a second round of support,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Strauss-Kahn will obviously be absent from the meeting following his arrest in New York. The IMF’s Deputy Managing Director Nemat Shafik will be there instead. Straus-Kahn has been at the heart of EU/IMF negotiations over bailouts for Greece, Portugal and Ireland, and his arrest has cause concern whether the IMF decisions on the bailouts will be affected.
The European dismissed concerns that Strauss-Kahn’s arrest would have any impact on any of the bailout programs.
“I would like to reassure public opinion, the markets and the press, there’s absolutely no question: decisions which are under way will not be impacted and this will not have an impact on the programs being applied,” Commission spokesman Amadeu Altafaj told reporters.
Ahead of the meeting, sources said EU and IMF inspectors would tell euro zone finance ministers they were not yet happy with Greece’s proposed budget steps and that more talks were needed on fiscal and privatization plans.
The Euro plummeted upon the open of Asian trading, opening with a gap, and dropping over 70 pips from Friday’s close. By the open of New York, the Euro rose to a session high of $1.4243 from 1.4130.