The EUR has made inroads against GBP during Thursday’s trading, with the pair dipping back below 1.41 on the exchange. It’s been an extremely volatile week for GBP/EUR rates, even by recent standards. As discussed in previous posts Greece missed its repayment on Tuesday and as such defaulted on its loan, which initially caused the EUR to lose value against the Pound. The IMF were keen to offer further talks but Mr Tsipras decided he would take the vote to the Greek public by calling a referendum for this Sunday, so the Greek people could decide whether or not to accept the reform proposals being put forward.
Unfortunately for Mr Tsipras this stance seems to have backfired as no outcome from the referendum is likely to help his cause, as a NO vote would have alienated Greece form its creditors completely and a YES vote would see his position as Prime Minister become unobtainable. He has now tried to back track and has accepted the new bailout proposals minus a couple of minor changes but it now seems as though Germany in particular, want to see the outcome of the referendum before discussing any further proposals. It almost like they are saying to the Greek government that they have made their bed and now they must lie in it.
Personally I feel a resolution will be reached, which will give Greece at the very least another stay of execution and therefore I would be very tempted to take advantage of the current levels, which remain close to an 8 year high.
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