The Euro steadied in London after a bout of profit taking by investors in the wake of Greece’s election outcome which earlier sent the Euro to an 11-year trough. Election projections indicate a win for Syriza, the anti-austerity party, which is likely to put Greece at odds with international lenders who mandated austerity for the beleaguered nation in exchange for a bail out, Analysts believe that Syriza’s win could result in the country pulling out of the Euro area.
As reported at 8:34 am (EST) in London, the EUR/USD was trading at a session low of $1.1098 before recovering to $1.1224. Despite being priced in for the most part, analysts still believe that the Euro is likely to further deteriorate after the European Central Bank indicated last week that money printing, through government bond purchases, was in the works. The EUR/JPY was trading earlier at a 1½ year trough at 130.160 Yen before bouncing back to 131.500 Yen. The EUR/GBP struck a 7-year trough at 74.06 pence.
Syriza Holds the Key
What could push the Euro loser is the stance that could be taken by the Syriza party; analysts say if they reiterate the need for additional negotiations of the earlier bailout provisions with the trio of lenders, known as the Troika, there could be a selloff of the common currency that might even test the $1.10 level, and beyond that, a move toward parity.