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26 Jan 2015
ECB already doing what Greece needs – DBS
FXStreet (Barcelona) - The DBS Group Research Team comments on the bailout scenario post the Greek elections and benefit to Greece from ECB’s stimulus package.
Key Quotes
“With the left-wing opposition Syriza party winning the snap election in Greece over the weekend, EUR/USD extended its downside this morning towards 1.11.”
“Although Grexit remains a possible but improbable outcome for now, the party’s anti-bailout stance has set the stage for difficult negotiations with the troika. A middle path is possible if talks center on structural reforms instead of austerity. There is some scope for optimism here. The ECB no longer needs to stop the euro from breaking up, a key reason for austerity during the crisis.”
“Last week’s QE and its push for a weaker euro since mid-2014 to fight deflation reflects a shift back towards supporting growth and bringing down the unemployment rate. Put simply, the ECB is already doing what Greece needs.”
Key Quotes
“With the left-wing opposition Syriza party winning the snap election in Greece over the weekend, EUR/USD extended its downside this morning towards 1.11.”
“Although Grexit remains a possible but improbable outcome for now, the party’s anti-bailout stance has set the stage for difficult negotiations with the troika. A middle path is possible if talks center on structural reforms instead of austerity. There is some scope for optimism here. The ECB no longer needs to stop the euro from breaking up, a key reason for austerity during the crisis.”
“Last week’s QE and its push for a weaker euro since mid-2014 to fight deflation reflects a shift back towards supporting growth and bringing down the unemployment rate. Put simply, the ECB is already doing what Greece needs.”