On late Friday, rumours were leaked by a German news report that suggested that Eurozone finance ministers who were meeting in Luxembourg discussed the possibility that Greece would be leaving the Eurozone.
This spurred fear in the markets and caused the Euro to drop. The EURUSD dropped to its lowest level in more than two weeks, heading for its worst week since the beginning of this year.
The Greek government quickly denied the report but these did little to calm fears or help the Euro’s plunge.
EURUSD hit down to 1.4348, its lowest since april 20.
Andy Busch, currency and public policy strategist at BMO Capital Markets in
Chicago commented said “To me, the leak of this story tells me that the Greeks are
not happy with the terms they are getting (from the European Union and International Monetary Fund) and are attempting to put pressure on the other parties”.
The Euro has been suffering since Thursday’s the ECB’s (European Central Bank’s) dovish statement. In early US trading, the single currency was at 1.4572, which was a far cry from its 17-month high reached just two days ago on Wednesday.
Some traders who are still holding log Euro positions are bullish and said the Euro is still likely to gain against the greenback in the medium term, as euro zone interest rates are expected to rise much more quickly than those in the United States.