* The Euro gained 2% against the dollar in Q2 2011
The Euro gained yesterday on the foreign markets, reaching a three-week high against the dollar, as investors anticipate the ECB will raise the interest rate this month. The subsiding of the fears over an immediate default of Greece also had a positive impact on the Euro, after, the Parliament of Athens approved the 78 billion Euros austerity plan on Wednesday. Yesterday, the Greek Parliament approved the norms needed for the implementation of the 5-year austerity plan.
Given these circumstances, in their reunion of July 3rd, the European leaders will probably decide to release the next tranche of 12 billion Euros, out of the total loan of 110 billion Euros that Greece received last year from the IMF and the EU.
The Euro rose 0.3% at 10:24 on the New York market, to 1.4483 dollars. Previously, the exchange rate had climbed to 1.4521 dollars, the highest level since June10th.
In June, the Euro gained 0.6% against the dollar, and 2.3% over the quarter which ended yesterday.
Analysts are expecting the ECB to raise the policy rate in its meeting scheduled for July 7th, after its president, Jean-Claude Trichet, reiterated his statement that he is extremely vigilant when it comes to inflation.
In April, the ECB decided to raise the policy rate by 0.25%, to 1.25%, to keep inflationary pressure under control. According to analysts, this opens the door for further rate hikes, which will support the Euro.
* German banks get involved in the rollover of Greece"s debt
The largest financial groups in Germany and the government of Berlin have agreed to rollover Greece"s debt, according to the announcement made by the Finance Minister Wolfgang Schäuble. German banks and insurers own over 2 billion Euros in bonds backed by the Greek government, with a 2014 maturity, and over 4
