The possibility of a Grexit, however remote, may induce a chain of events which markets may not be prepared for. Ukraine and the Middle East are sources of geopolitical risks. Given the prospects in the US economy, the US dollar has strengthened against most currencies and, in particular, against the Euro, Canadian Dollar, Australian Dollar and the Japanese Yen.
A major assistance package has been established jointly by the European Union (EU) and the International Monetary Fund (IMF) for Greece. To backstop near-term financing needs of its members more generally, the EU has established a European Financial Stabilization Mechanism with up to 500 billion euros in funding, which could be used in tandem with significant bilateral support from the IMF.