Euro still likely to fall further

The euro remains vulnerable to a resurgence of uncertainty over Greece’s membership of the single currency and the risks of contagion. But even if “Grexit” were off the table completely, the prospect of a sharp divergence in monetary policy between the US and the euro-zone points to renewed euro weakness. Indeed, any reduction in concerns over Greece – and China – may simply clear the way for the Fed to begin raising US rates sooner and further than the markets currently anticipate.