The Euro was bruised badly after comments by Jean-Claude Juncker regarding IMF funding to Greece. The head of the Eurogroup of finance ministers wanted the markets to take caution that in the event that the International Monetary Fund not pay its next tranche of aid to Greece, then other Eurozone countries will feel pressured to take on the responsibility, which they would be reluctant to do so.
“If the Europeans have to acknowledge that the disbursement from the IMF on 29 June cannot be operationally implemented then the expectation of the IMF is that the Europeans would step in for the IMF and take upon themselves the IMF’s portion of the financing,” Jean-Claude Juncker said at a conference. “That won’t work because in certain parliaments — Germany, Finland and the Netherlands and others too — there is no preparedness to do so,” he added.
Steven Butler, head of trading at Scotia Capital in Toronto said that “The market was caught a bit long up near $1.42 and then Juncker’s saying the IMF may not release the next tranche (of aid) for Greece really got the market worried. Everyone was hitting bids and asking questions later.”
The Euro plummeted from the day high of 1.4205 down 140 pips to a low of 1.4067 by 1500GMT.