THE GREEKS BRING GIFTS
The EUR/USD drop to 1.3019 (the pair is trading in the area of 1.3060 at the time of writing) Monday morning has heralded a challenging week for the block currency in anticipation of the European Central Bank (ECB) meeting scheduled the coming Thursday.
One of the topics on the ECB agenda is the Euro interest rate. Currently the said coefficient is on its long-time bottom of 0,75, and there are suspicions to the effect that the Bank might cut the rate even lower. However, most experts predict the opposite, as such a measure would broadcast discouraging news for already shaken economies. The Bank is likely to do its best to avoid such course of action.
Another unpalatable item on the ECB Thursday's plate will be bailout for Cyprus, the fifth of its kind since the beginning of the current crisis. Cyprus is in nearly as sorry a state as is her mother civilization, having lost more than 4 billion Euros upon "restructuring" of Greece' debt, the loss piling upon her own debt of 15 billion Euros. Cyprus has been trying to obtain a bailout from her European partners since June, with mixed prospects of success, as several of the heads of continental treasuries are not at all convinced that the island nation would be able to make her own living after the bailout. The Finance Ministers promise the near-completion of the bailout scheme at the ECB meeting. Be that as it may, the Cyprus theme is likely to factor in the Euro performance throughout the week.