EUR/USD: Greece Still The Unknown; Next Week Range & Outlook - BTMU
The following is EUR/USD range and outlook for next week as provided by Bank of Tokyo-Mitsubishi UFJ (BTMU).
EUR/USD – NEUTRAL BIAS – (1.1200-1.1600).
The focus in the week ahead is likely to remain on Greece with the talks this week not reaching a conclusion and set to extend into next week. A Greek government official confirmed today that it continues to seek a “bridge-financing” agreement with the government maintaining that it will not seek another tranche of funds under the current bailout agreement. Financing from ECB profits, additional T-bill sales and excess funds from the bank recapitalization funds could all be tapped to finance a bridge deal. Further talks are expected with a conclusion set for 16th February. We’re not sure we’ll get a definite conclusion by next Monday but for sure Greece will remain in focus.
The key event for EUR/USD outside of the euro-zone will be the semi-annual testimony to Congress by Fed Chair Yellen – but that comes the following week – on 24th/25th February. With no major dollar specific events before then, we are inclined to think that the EUR/USD rate will remain broadly stable.
While Greece might be a negative factor, we don’t see next week as necessarily being a deadline that could spark selling – hence we maintain our recent neutral bias. The Russia/Ukraine ceasefire deal at least takes one potential negative risk off the table over the short-term.
