Greek Financial Crisis The Greek Crisis Pushes Up The Dollar

The Greek Financial Crisis Seems To Be Spreading Wings and Sending icts jitters down the World Economy. Risk aversion Seems To Be Back With A Vengeance. Indebted to Lease Out the Greek economy, central banks SEVERAL Including the Greek central bank & the ECB HAD Bought trillion worth of dollars of Greek Government Debt. Now, With news of The Possibility of collapse of Some Greek banks, the Greek Government Paper May Actually Turn Out To Be Worth Less Than Originally it WAS. This Could Have A Significant Impact On The Euro, Which now has caused considerable exposure To The Substantial Amount of Loan To The Greece. The sudden revelation about the Greek crisis cam When Standard & Poor's credit ratings are pared icts Greece into "junk" ratings Territory and Slashed icts is Portugal.

The freshly brewing Greek Financial Crisis Is Not Limited To The Boundaries of Greece. SEVERAL Other European banks from France and Germany Have exposure amounting to Nearly $ 125 billion. The exposure to Greek German debt includes € 9.1 one billion Invested by Hypo Real Estate and € 4.6 one billion worth of Greek bonds Held by Commerzbank.

The nervousness Amongst investors WAS Evidence from the Fact That SEVERAL currencies dipped Versus the dollar, Including The Canadian dollar, Which Recently HAD ITS flexed muscles and Gone With The Above parity U.S. dollar. However, the Greek Crisis Seems To Have Made The Canadian dollar barrier icts sacrifice part of recent gains and it Fell to below parity Levels With the U.S. dollar. The Australian and New Zealand dollars Fell Against the U.S. dollar sharply Suggesting That investors are turning risk aversion due to the Greek outcome. The U.S. dollar rose aussi Versus the yen Amongst Other currencies. The Euro, Which Can Be Expected to The Most Affected due to it Being the denominations of currency for the Majority of Greek debt, lost aussi Substantial Grounds to the U.S. dollar is the Greek rating downgrade. It Appears That The Dollar Continue to Dominate The World of currencies As The safe haven currency.

The Euro's high exposure Is The result Of The ECB's relaxed collateral rules prevalent since 2008, When The Financial Crisis Intensified. Thesis relaxed rules Have Proved a boon for Greek banks, Which Have Used Their sacrifice part of Greek Government holding to secure cheap loans Euro. Now, With The Greek sovereign rating Being Cut, The Value of the Greek bonds taken as collateral, Is Under Question. As per a Moody's report, Greek banks HAD one billion in about € 68 ECB Funding At the End of March. While INITIALLY, The ECB's lifeline extended to Greece May Have helped the Greek debt Contain Crisis Spreading to Other Parts of The World, the arrangement has limitations icts. With Portugal aussi Facing a downgrade, The Possibility of a debt crisis more Widespread IS Likely. If The ECB continued to salvage autre dette ridden European nations, The Value Of The Euro Could Come Under Question.

However, not salvaging a crashing economy Even Worse Could Have Implications for Europe And The Euro. Malthus, The ECB Along With Germany and the IMF are Likely to Be Forced to offer a bailout package to Greece Further, Such That Another Round of financial turmoil is Not Created. All Said and Done, a sign of crisis anywhere Seems To Bring The U.S. dollar sharply back into focus and it Appears That The Dollar Still Remains the preferred choice in times of Economic upheaval.