We asked traders about the consequences of a Grexit
Matt McKinney @mmckinney17
Fundamentally, a Grexit could be a negative factor for the euro currency and the eurozone. On the surface, how could a country dropping out or getting kicked out of a currency be a positive factor? I’ll tell you how.
What about getting rid of the weak link in the chain? What about a nation that has severe sovereign debt issues like Greece? Now with the austerity measures that will be in place, not to mention the fact that the banks are closed in Greece all are bad signs in my view. Why would you want a country like this in your “club”? Greece, from what I’ve heard, doesn’t really manufacture anything, and the only viable economic asset is tourism; I haven’t traveled there, but people who have tell me that the Greek people are rude to tourists.
That won’t last it seems to me, although I would love to travel there myself. At any rate, I can’t think of any real reason to keep them around and in the eurozone. They were not a viable country when they were invited in and they are not one now. I predict they will need another “bailout” in the next decade. They are not willing to change. Reform apparently doesn’t translate.
Technically, the daily euro currency chart tells the story. Pretty much when this whole crisis came to forefront, the 6EU15 ran from a low on April 13 of 1.0545 to high on May 15 of 1.4850. It actually went up! That is a significant rally. Since then we fell back to a low of 1.0837 on May 27 only to consolidate since then. Other than the major rally that we saw from the middle of April to the middle of May, the market remained quite indifferent to the whole idea of a Grexit.