Traders reacted swiftly on last nights victory of the left-wing “Syriza” party in elections in Greece, which leftists won thanks to anti-austerity promises in pre-elections campaign.
Just minutes after beginning of Sydney session and in parallel with election results announcements, EUR fell to $1.1098, a level seen last time in September 2003, but also skidded to a more than 11-year low against yen and to the 7-year low minimum vs GBP.
The election results are second blow for EUR over the last few days, since late last week, when European Central Bank announced huge bond-buying stimulus program.
Next few days traders will be looking if Syriza will be able to constitute the new government on their own terms, since results projections shown that they will have 149 seats in 300 seat Parliament.
In his first post-election speech, Syriza leader Alexis Tsypras announced end of “humiliation and suffering” and roll back of austerity measures.
If Syriza secures an outright majority, traders foreseen the risk of euro selling picking up during Asian session.
However, it is hard to predict long-term euro swings due to fact that most of key lenders and major financial players still believe that Tsypras, who is set to become prime-minister, would make some compromises with International monetary Fund and European Union to avoid worst case scenario-“Grexit”, last stage of Athens’ collision with EU lenders that would result in leaving eurozone.
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