Greece May Need Two Currencies Says Germany

  • Posted Friday, May 22, 2015 at 07:26 AM

Los Angeles CA, May 22 (Tangible Investments) - by James O'Dell - The Gold price edged higher in early trading on Friday after Gold and Silver prices ended mixed on Thursday, with Gold easing $3.30 or 0.27 percent to close at $1,206.50 an ounce as the dollar stalled on weak U.S. manufacturing data ahead of a speech by Fed Chair Janet Yellen on the current outlook for the world's biggest economy. Silver gained $0.04 or 0.23 percent to close at $17.16 an ounce while the Gold/Silver ratio fell to 70.31.

"We get inflation data from the U.S. economy and comments from (U.S. Federal Reserve Chair Janet) Yellen later today, which will impact short-term price direction," said Jens Pedersen of Danske Bank. "There is consensus among analysts that the rate hike is now being pushed back to September, but the risk is the Fed will postpone the rate hike towards the end of the year or even the beginning of 2016, which could be supportive [of Gold]."

In the euro zone, German Finance Minister Wolfgang Schaeuble argued on Friday that Greece may need another currency to exist alongside the euro, just in case the nation’s negotiations with its creditors should fail. Schaeuble used the nation of Montenegro as an example, because even though that country uses the euro, it is not a member of the currency union.

Meanwhile, European Union (EU) leaders are attending the Eastern Partnership summit in Riga where Greece is hoping to hammer out a short term deal to avoid defaulting on its mountain of debt. Greek government officials say that Greece will be unable to repay a 1.5 billion debt to the International Monetary Fund (IMF) on June 5th, unless a deal is reached within days.

German Chancellor Angela Merkel still says that her goal is to keep Greece in the euro, but her finance minister says that he would not rule out a Greek exit from the 19 nation currency.

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