Greek spreads over bunds have widened to 276 bp, signalling intensified jitters as Trichet said the ECB will not amend its rules to allow Greek debt to be used as collateral at the ECB if it is downgraded further.
While the point has been made that Greece is only a tiny slice of Eurozone GDP, it is important to remember that if one member were to leave or be forced out of the euro zone, the market would immediately go after the next weakest link…That’s the way these things played out in past European currency crises.
EUR/USD trades in the lower reaches of recent ranges. Central bank buyers are presumed ahead of 1.4450 and stops are building below that level.
