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Greece And Now Puerto Rico Mean Haircuts Aplenty
When the euro began to tumble earlier today on the news out of Greece, the Swiss thought and thought as euro-investors streamed into the franc. Then the Swiss National Bank sold its own currency to make it less attractive as a haven.
In an unexpected turnaround of play, the euro is up against the U.S. dollar. The dollar is also down against the yen รข?? even more than it is compared to the euro. (Dollar down 0.75% in afternoon trading for the euro, 1.15% again the yen.)
This seems to be a vote of confidence for the euro, which had been slipping against the dollar. The coherence suggests that the European Monetary Union, as distinct from the EU proper, will survive a Greek exit should it come to pass. Some experts are pointing to money movement into the German Bund as more evidence. But that is a vanilla safe-haven move as is a parallel move into U.S. treasuries.
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