Euro Clock Ticks Down

Two days after the gripping Greek gamble to refuse further austerity in return for funds, Greece and its creditors remain worlds apart on how to proceed in a manner that causes the least amount of destruction. This has not prevented EUR/USD from crashing under key short-term support, as prices continue to fall below reopening values from yesterday. European Commission technocrats have shelved proposals offered the previous week in clear retribution for the Greek “Oxi” (no) vote, raising further the eventuality of a total default and the issuance of a currency that will run parallel to the Euro. Seen as the most reasonable scenario by ECB officials, such as Ilmars Rimsevics, a member of the Bank’s Governing Council, Rimsevics went on to state quite clearly that the Greek vote was a brave vote “out of the Eurozone”, perhaps a harbinger of future copycat nations in similar predicaments. The undemocratic nature of the current monetary union is presently being revealed in a narrative that could easily inspire additional nations to question their rights and obligations.

EUR/USD: 1 Hour

In fact, analysts are quite clear on the matter that the political implications of Greece’s exit from the union are much more disconcerting than those of the actual (and not-at-all certain) default. Greece’s former Finance Minister Yanis Varoufakis stressed this point to Bloomberg Television last week when he described the entire crisis as primarily political. What else is being exposed is the questionable viability of the price stability as an actual goal, especially considering that it has yet to be achieved, even fifteen years after the Euro’s inception. As time runs out for everybody concerned, investors may quite simply be losing their confidence in the future of the Euro. The Euro is already trending lower after correcting slightly upwards to fill yesterday’s opening gap. Today’s price action is a marked departure from the optimism that pervaded markets yesterday with EUR/USD selling off the entire European session and gold is also being offered zealously – its price losing more than $18 points in the last 3 hours alone. Today’s plunge in risk-assets hints that a more protracted move lower might be in the cards in coming sessions.

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