Financial markets are finally showing concern over the negotiations between Greece and its creditors and the euro is struggling today. Concerns that an agreement really won’t be reached, and that Greece will default, are on the rise.
Forex traders and other investors are becoming nervous about the situation with Greece as negotiations continue to stall. Unless the country receives new funds, Greece is likely to default on a 1.6 billion euro payment it owes to the International Monetary Fund. Such a default could trigger an exit from the eurozone.
Over the weekend, talks about what could be done collapsed, with each side blaming the other. Greek leaders are maintaining the hard line against austerity and other measures that they adopted as part of the election that put the leftist party Syriza in power. Greece wants the debt restructured, including a writedown of part of its debt, while many European creditors are resolved to avoid this step.
The news is sending eurozone bonds lower, with prices dropping and yields rising as analysts and investors prepare for the possibility that Greece will eventually be forced out.
At 11:51 GMT EUR/USD is down to 1.1261 from the open at 1.1284. EUR/GBP is down to 0.7215 from the open at 0.7232. EUR/JPY is down to 139.0990 from the open at 139.2460.
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