The euro initially came under some pressure given the uncertainty over whether the 'pari-passu' pledge would still hold in the case of a possible future default. However, our strategists believe that what Noyer was trying to communicate is that the fact that the ECB has now waived seniority demonstrates how small it sees the probability of further restructuring, and it is hard to see the ECB backing away from being pari passu given Draghi's recent commentary.” writes Research Analyst Chris Walker at UBS.
The euro later retraced most of the earlier move as wider risk appetite recovered. In addition, the joint press conference by German Chancellor Merkel and Greek Prime Minister Samaras was largely in line with expectations. Samaras pledged to implement reforms and stay in the Eurozone, and Merkel saying she will wait for the Troika report before making a decision on Greece. Samaras noted that the issue of extending the deadlines for Greece was discussed with Merkel but refused to give any further details.