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Koefoed: Why EUR could strengthen if no deal with Greece
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Talks between Greece and its international creditors are dragging on and the euro remains range bound against the dollar as the markets wait for news of a deal, but that may not be for long, says Saxo Bank’s Mads Koefoed.
Previously, any positive news in relation to the bailout talks has triggered a EURUSD rally, Koefoed says. This means that any bad news could see the pair trade lower in the short term, he adds.
He expects the talks could drag on until the 11th hour and remains convinced that the two sides will eventually reach an agreement on a new bailout for Greece.
But no deal and Greece leaving the euro could potentially be good news for the euro in the long term. That is because the rest of euro area is doing quite well, Koefoed says, pointing to recent data out of Germany and surveys on GDP growth.