The euro fell sharply against the dollar soon after the anti-austerity Radical Left Coalition (SYRIZA)) party won the Greek elections. Traders pointed to uncertainty about what will happen next in Greece and this led to the euro falling to an 11-year low at $1.1088.
“Euro selling pressure will continue as Greeks rejected fiscal austerity, heightening the possibility of Greece leaving the currency bloc,” said Toshiya Yamauchi, a Ueda Harlow Ltd senior analyst in Tokyo, speaking to Bloomberg.
Oil slid in Asia with the US crude following, reaching a six-year low, due to the uncertainty brought on by the Greek results.
The financial world fears that SYRIZA leader Alexis Tsipras would keep his pledge and renegotiate Greece’s debts as well as reverse many of the austerity measures that have been implemented in Greece in exchange for bailout deals.
His first message following his win was that the troika for Greece is a thing of the past. That alone was enough to send the euro on a downward spiral.
In response to the Greek election, European finance ministers are planning to assemble in Brussels to discuss ways in which to respond to the Greek election. Sending Greece out of the eurozone could create a slide that would send other countries, like Italy, slipping.
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