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Screenshot of a breaking news alert e-mail from Q2 2017
The next steps are anyone’s guess.
But for today, victory seems to belong to Greek Prime Minister Alexis Tsipras and his backing of a ‘No’ vote, rejecting austerity measures as part of a planned bailout of Greece proposed jointly by the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB).
Early returns show a landslide victory for the No vote. With about one fifth of ballots counted, official figures showed 60.4% for ‘No’ versus less than 40% for ‘Yes’.
The effects of the No vote were felt immediately in the currency markets, with the Euro dropping as the EURUSD fell more than 1.2% in the past hour, sitting as of the time of this writing at 1.0973. Before the weekend the Euro was above $1.11.
The key questions in the minds of currency traders seem to be:
- What does the No vote mean for the Euro, and for overall FX rate volatility in the coming days?
- Is Greece on its way out of the EU? Or will the EU blink and offer improved bailout terms, with less pain involved for Greek citizens?
- Are we going to see a return of the Drachma?
- Might Greek bank depositors be facing a haircut of their deposits?
- Will Greek banks be able to open this week?
Greek PM Tsipras has promised that Greece’s banks – closed since last Monday – will be open by this coming Tuesday. However how that will happen is still unclear. It looks for now more likely that Greece’s banks and its ATMs will be out of cash by Tuesday.
Stay tuned to LeapRate as we continue to follow this interesting story.