EURUSD makes new highs…
The Friday afternoon squeeze is on as hopes for Greek solution and weaker GDP lead to the dollars decline. In Greece the comment from a spokesperson is there is one step left for an agreement. At the same time the word is a 2nd bailout may be coming from the EU but further funding from the EU is coming to an end. Maybe the haircut will get them over the hump and they can fund addtional payments through positive cash flow and austerity measures, but if they can not, I do not think tapping the debt market will be an option. The situation is still vague but the market is getting used to it and it may just be a big stall to allow banks more time to shore up balance sheets via the ECB version of QE.
Meanwhile, in the US, the market is realizing that the GDP was not all that great and with a dovish Bernanke/Fed behind the wheel promoting a lower dollar and the potential for more QE, maybe that is the way to go. The only thing missing today is a roaring stock market in the US.
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