Dollar Falling as Traders Bet on Greek Rescue
The U.S. Dollar is under pressure overnight as traders are liquidating long positions on the prospect of that a deal to rescue Greece from its sovereign debt problem is being worked out in Brussels. Speculation is rising that some kind of “bailout” package is being created which would help shore up the Greek budget and help restore confidence in the Euro Region.
In a scene out of the movie “Wall Street”, the travel habits of ECB President Trichet are being tracked as if they are an indication of an impending deal. It has been reported that Trichet cut back a trip to Australia to attend a European Union meeting in Brussels. The market is reading this as a sign that negotiations have reached a critical point and that an announcement of a plan to back Greece and perhaps other struggling nations is ready to be revealed.
Appetite for risk is being renewed as investors are gaining more confidence that Greece’s fiscal problems will be resolved and the threat to the global economic recovery will be diminished. Both commodities and stocks are on the rise, taking with them commodity-linked currencies such as the Canadian and Australian Dollars.
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