“FRANKFURT (MarketWatch) — Greece continues to rattle investor nerves ahead of a Thursday deadline for private investors to voluntarily offer up Greek government bonds in a debt swap that will cut the value of their holdings by more than half.
Strategists blamed jitters over the process combined with concerns over global growth prospects as spoiling investor appetite for risk on Tuesday, sending European and U.S. equities lower and undercutting the euro and other risk-oriented currencies. See Market Snapshot.
The euro EURUSD -0.77% slipped 0.8% to trade at $1.3119 in recent action. Read more in Currencies.
“It will only become clear toward the end of the week how many investors have agreed to the ‘voluntary’ restructuring of Greek debt,” said Lutz Karpowitz, currency strategist at Commerzbank.
The Institute for International Finance, which helped negotiate the terms of the bond swap, reportedly warned in a recent memo that a so-called hard default by Greece could cause at least 1 trillion euros ($1.32 trillion) in damage to the euro-zone economy. That figure includes the need for aid for Italy and Spain to keep the crisis at bay as well as €160 billion in bank recapitalization costs, Reuters reported Tuesday. See full document as shown in the Athens News.….”
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