Home 2 Flows To Impact EUR; A 75% Probability To Greece
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2 Flows To Impact EUR; A 75% Probability To Greece

With the recent deterioration in Greece, there is increased talk about the chance of Greece leaving the euro-zone, aka “Grexit”.  Mohamed El-Erian, chief economic adviser at Allianz, said the odds stand at 85%. European officials already talk about this in the open.

The team at BNP Paribas  sees  a higher chance of a more optimistic outcome and explains what moves the common currency:

Here is their view, courtesy of eFXnews:

BNPP’s economists estimate a 75% probability that the Greek referendum will result in bailout conditions being accepted.

“However, much uncertainty will prevail over the week ahead of the referendum. We view there are two potential flows that will be impacting the EURs move from here over the short-term,” BNPP argues.

On one side, rising political risks and expectations of further ECB easing make the EUR an attractive short.On the other side, there likely remain some residual EUR-funded risk trades after last week’s positive sentiment from Greece which could be unwound,” BNPP clarifies.

Net-net, we remain EUR bears, highlighting from a positioning perspective EUR shorts currently stand at -11, close to their lightest level this year,” BNPP adds.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.