Euro showing how little it cares about Greece's fate
The real story for euro traders might be how little Greece matters. Gone are the days when every headline sparked a swing. Peripheral bond spreads widened today but there are very few people who believe that contagion from a Greek default would spread to the rest of the PIIGS. Spanish and Italian 10-year yields are below 2.3% and Portuguese 10s are near 3%.
Even in the event of capital controls or a Grexit, I don't envision people in Portugal rushing to the ATMs. You can argue that Cyprus might be a risk but you can also argue that Cyprus doesn't matter.
Again and again this week, the story has been rock-solid dip buying in euros on negative news. The other part is how the US dollar hasn't been able to sustain a bid. That's been especially true in US trading.
Overall, I think it's still too early to give up on EUR/USD shorts as a longer term trend. But if your confidence hasn't been rattled this week, then you weren't paying attention. That said, it's only been a few weeks and the FOMC is next week. A hawkish hint is all it may take to put the US dollar (and EUR/USD shorts) back on course.
