Eurogroup Meeting Turns Contentious Reversing Euro Gains

The Euro moved lower against most major currencies following an unsuccessful meeting in Riga. ECB’s Draghi said Greek banks can get ELA as long as they have collateral, but he also confirmed earlier reports that the central bank may examine a change in haircuts for Greek funding, which would curtail the cash flow further. Draghi highlighted the progress achieved with Greece in the last days, but Eurogroup head Dijsselbloem stressed that there will be no further aid payment without a comprehensive deal.

There was no deal on Greece at the Riga meeting, which means Greece will have to survive without further aid payments at least until May, when the Eurogroup meets again. The elusive reform list is still missing and talks at technical level are stalling. The Greek government remains defiant and went into the meeting with a public display of optimism that once again proved pre-mature.

The election promises are impossible to keep if Greece wants further aid at the same time and at one point Tsipras and Varoufakis will have to make a choice between following creditor recommendations and getting further aid or default. The latter would almost certainly mean EMU exit, although there are scenarios where this could be prevented, although if Greece remains on confrontation course with the rest of the Eurozone it will be difficult to see how this can be the case.

Greek Finance Minister Varoufakis is taking a hammering from frustrated Eurozone Ministers. Creditor officials went into the meeting with little hope of a deal as technical talks haven’t sufficiently progressed, while Greece’s Tsipras seems to try and bypass Finance Ministers by going directly to German Chancellor Merkel. Greece’s push for an April deal is a sign that the country really is running out of cash now without the disbursement of further aid.

The EUR/USD ran into resistance represented by a downward sloping trend line that connects the highs in April with the February 14 high near 1.09. Support on the currency pair is seen near the 10-day moving average at 1.0730.

The post Eurogroup Meeting Turns Contentious Reversing Euro Gains appeared first on Forex Circles.

Source:: Eurogroup Meeting Turns Contentious Reversing Euro Gains