FOREX-Euro down 0.6 pct on month-end flows, clock ticks for Greece

30 Jun 2015 | Author: | No comments yet »

Asian shares gain after global rout as euro slips.

The world is going bonkers over whether Greece will default on the 1.6 billion euros that it needs to pay the International Monetary Fund(IMF) today. Riddle me this: How can the euro be heading for its best quarter in four years when Greece is on the verge of defaulting and possibly exiting the currency?Wellington: Asian stocks rose with US index futures in the wake of a $1.5 trillion global rout Monday, while the euro pared a quarterly advance as investors watch developments in Greece. All together the country owes 240 billion euros to the troika of European Commission, European Central Bank(ECB) and IMF.With the default, chances are Greece will have to exit from the Eurozone and stop using euro as its currency.

Syriza, the Greek coalition of the radical left that is so admired by the sort of people who made sure Labour lost here, has finally led its voters to the point where denial meets reality. One answer is that Mario Draghi retains the faith of traders and investors that he won back in 2012 when the European Central Bank head pledged to do whatever it takes to hold the euro together.

And yet Alexis Tsipras, the Greek prime minister, still refuses to face it, calling a referendum that asks a question pretending Greece can stay in the euro without having to abide by its rules. The common currency started the week tumbling almost 2 percent after Greek leader Alexis Tsipras’s decision to call a referendum on aid proposals derailed negotiations with creditors. It was at $1.1163 as of 8 a.m. in London, poised for a 4 percent advance for the quarter, the most since the three months ended March 2011. “Given that the risks of a default and an exit have obviously risen quite dramatically in the last week, I would have expected the euro to be weaker,” said Ray Attrill, global co-head of currency strategy at National Australia Bank Ltd. in Sydney. “There is a fairly genuine sense of complacency or belief that it really doesn’t matter how Greece plays out next week.” Draghi has more than words on his side if this round of Greek roulette gets messy. In addition to emergency facilities to support the region’s banks — a program that has already kept Greece’s lenders alive — the ECB is already buying 60 billion euros ($67 billion) a month of bonds and it can increase asset purchases through the so far unused Outright Monetary Transactions program.

I thought Germany would pay up to preserve the euro, but Andrew Lilico was right in April when he predicted Greece would leave the euro this year. 2. “Because capital punishment is constitutional, there must be a constitutional means of carrying it out.” Yesterday’s US Supreme Court ruling, again by five to four, that midazolam could be used in lethal injections, opens with a striking example of legal argument. Meanwhile, Greece joined the Eurozone, as countries which decided to use the euro as their currency came to be referred to as, on June 19, 2000 and gave up its currency, the drachma.

It was notable that two justices, Stephen Breyer and Ruth Ginsburg, argued that the court should reconsider whether the death penalty is in fact compatible with the Constitution. Investors should look at stock market risks from a long-term and rational point- of-view, according to a statement from a sub-committee of China’s Asset Management Association.

Between 1990 and 2010, nearly 1.6 trillion euros have gone from west to east to pay for all kind of things from pensions and salaries of government employees, to build roads and cities, and factories. Matthew d’Ancona’s column in The Guardian yesterday was good and clarifying on the “lone wolf” objection to opposing the ideology of Muslim grievance. The government is considering pushing China Nuclear Engineering’s IPO to a later date because of current market conditions, according to people familiar with the situation, who asked not to be identified as the matter is private. This gave the German exports a push that was badly needed and ensured that the share of exports in the total German GDP shot up from 22% to 33% between 1993 and 2000. In a monetary union without a political union the labour force can’t move around freely and this hurts the industries and economies of one set of countries.

Let’s say that the wages in Germany are lower and are rising at a much slower rate than wages in Greece, where the wages are higher and rising at a faster pace. Hence, the competitiveness that Germans had acquired because of lower wages would go away and businesses in Greece and other countries would be equally competitive. As the writer Michael Lewis said in an interview “The Greeks will never be as productive as…Germans, and the Germans will never be as unproductive as…Greeks.” Niall Fergusson, the premier economic historian of this generation is of the opinion that a politician union of the countries in the Eurozone has become a necessity. The effects of any country leaving the euro could go far and wide. “It could even be a tsunami that hits New York,” he said in a interview to the Sunday Times of London a few years back.

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