Greeks go to the polls on Sunday to vote on the creditors’ proposals. The most recent poll shows a tight race.
How will the euro react? The team at BNP Paribas weighs in:
Here is their view, courtesy of eFXnews:
The pace of new information on Greece may slow now, with the Greek government having signalled it intends to move forward with its 5 July referendum and eurozone officials having indicated they will wait for the results of the voting before reopening discussions, notes BNP Paribas.
“We continue to view the current period of elevated uncertainty as actually more likely to be supportive than detrimental for the EUR – elevated FX volatility is likely deterring eurozone investors from adding to international portfolios and discouraging rebuilding of EUR-funded carry trade,” BNPP argues.
“At the same time, the possibility of a successful negotiated solution being announced at any time makes more speculative market participants wary of building EUR shorts geared to renewed EMU existential concerns,” BNPP adds.
“We continue to look for resolution of the current impasse to clear the way for a resumption of broad EUR weakness,” BNPP aprojects.
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