All trading involves risk. Losses can exceed deposits.

Greece weighs on euro

The euro has drifted lower against the US dollar, as investors are concerned that Greece’s bailout fund is being used to service debt repayments.

All trading involves risk. Losses can exceed deposits.

The Athens administration is set to receive €5.8 billion from the troika this week which will prevent the country from running out of money, but a report into Greece’s financial situation has revealed that a large portion of the bailout funds is being used to pay off debt. Traders are concerned that the money isn’t being used to stimulate the economy, but instead going straight into bond holders pockets. This cannot continue indefinitely.

We are not expecting any major economic announcements from the eurozone today, traders will instead be anticipating the German, Italian and eurozone unemployment reports on Wednesday. If the updates are better-than-expected, we could see the euro trade higher versus the US dollar.

Both the Federal Reserve and the European Central Bank are holding meetings on Wednesday and Thursday respectively. Economists are not expecting a change in policy from either central bank, but any comments regarding reducing or maintaining stimulus packages could lead to a large move in the currency pair.

Spot FX EUR/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts