Euro Dips On Persistent Fears About Greek Debt |
| Wall Street Journal - Jun 6, 2011 |
The euro weakened modestly Monday, in a sign of market fears that new bailout terms for cash-deprived Greece may not be enough to help the country escape an eventual debt restructuring.
Late last week, senior euro zone officials struck a tentative accord to provide Greece with more financing. In a new wrinkle, private-sector creditors may be asked to bear some of the burden.
But a growing number of market participants say the new deal accomplishes little other than to provide Greece with temporary breathing space. The risk of a debt restructuring--and the prospect of an investor run-on the sovereign debt of other financially distressed euro zone countries--remains an acute fear in the market, analysts say.
That risk was crystallized by huge protests in Athens against new austerity measures, and a report in which a German official voiced doubts about Greece's new bailout deal being a fait accompli.
"We don't see the Greek situation resolving itself and we still see risk of contagion out there," noted Greg Salvaggio, vice president of capital markets at Tempus Consulting in Washington. "There's a lot of uncertain lingering questions that will prevent significant upside" for the euro, he said, adding that the single currency was likely to tread a broad range between $1.45-1.4750 in the near term.
Read Full Article from Wall Street Journal
- Posted: 2011-06-06 09:45:26
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