Search ForexCrunch

After a 17 hour marathon, Greece has reached a deal with its European partners. The details  of this agreement only to start negotiations  do not look promising,  and not only because of the horrible humiliation  that preceded it. While the threat of a Grexit is currently off the table, the deal could certainly be recessionary.

EUR/USD leaped on the initial news but is now clearly reversing course and falling to support at 1.1050.

Some details:

  • Talks for a bridge financing for Greece will begin immediately, to help cover its debt  immediate debt repayments.
  • Greek assets worth 50 billion euros will be moved to a fund sitting in Athens. Germany wanted it in Luxembourg.
  • Greece must pass  measures through parliament  until Wednesday.
  • The Eurogroup will then begin  discussions on a full ESM bailout, where debt sustainability can be addressed. Debt  sustainability was always an issue, as the IMF was forced to admit.
  • Debt relief will be discussed only after the first successful review.
  • The ECB will  discuss ELA later today. They may increase the emergency support now.
  • Greece must also reverse any  legislation that backtracks previous reforms.
  • The IMF  will be in play also in 2016.

Tsipras:

  • Greek Prime Minister Alexis Tsipras defends the deal, saying he faced difficult decisions.
  • He also said that after fighting abroad, now it is time to fight against  vested interests at home
  • He tries to find victory in the general promises on debt restructuring and mid-term financing.

Merkel:

  • On debt relief, the Eurogroup is ready to grant longer grace period and maturities – this is a concession to Greece.
  • Confidence can be regained.

Greek crisis – all the updates

Her is how it looks on the chart: after closing the  small gap, EUR/USD floated. The news of a deal sent it to 1.12 but almost instantly to 1.1052.

EURUSD down on Greek deal July 13 2015 ESM negotiations to begin

In our latest podcast we clarify Greece and also China, oil, AUD and more:

Follow us on Stitcher.