The Euro shrugged off worries about deepening risk of Greece-linked instability after an Ecofin meeting over the weekend produced no tangible deal on funding.
Talking Points:
Euro Shrugs Off Lackluster Ecofin Meeting Despite Rising Greece Risks
Kiwi Dollar Gains with Bond Yields, Hinting at Bets Against RBNZ Cut
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Currency markets were largely mired in consolidation mode in overnight trade despite seemingly ominous cues from the weekend’s Ecofin meeting in Riga. Newswires suggest the talks broke down amid procedural disputes between Greek Finance Minister Yanis Varoufakis and his counterparts, with apparently little time devoted to matters of substance.
The markets’ complacency despite seemingly growing Greece-fueled instability risk is surprising. Perhaps investors are holding out hope for a move to sideline Mr Varoufakis and deal with Prime Minister Alexis Tsipras directly, which some reports suggest may be more receptive to compromise. In any case, the Euro looks relatively unfazed thus far, with prices edging toward the top of their recent range against the US Dollar.
The New Zealand Dollar narrowly outperformed, rising as much as 0.5 percent on average against its leading counterparts. The move played out against backdrop of an increase in the island nation’s benchmark 10-year bond yield, hinting the move may have reflected speculation that the RBNZ will not cut interest rates at this week’s policy meeting.
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