Euro Uncertainty Follows E.U. Elections

By: Barbara Zigah

The Euro tanked hard against the U.S. Dollar in Asian trading as the results of the Greek and French elections suggest uncertainty for the Euro’s future. In France, Nicolas Sarkozy has lost his bid to become a 2-term president and in Greece, the current ruling party has lost its majority.

As reported at 11:40 a.m. (JST) in Tokyo, the Euro was trading at a low of $1.29552, before recovering to $1.2978, a loss of 0.8% from late New York trading on Friday. Analysts say that initial support is seen at $1.2950 but they also believe that as the European markets wake up to the news it’s possible that it could be overwhelmed given its fragility. The Euro also fell heavily against the safe haven Japanese Yen falling to 103.24 Yen, the lowest price since mid-February. The fall was harder still against the Pound Sterling, with the EUR/GBP pair dropping to 80.37 Pence, a low unseen in more than 3½ year.

For the most part, it is the surprise loss for the PASOK party in Greece which is of the greatest concern to investors, who had already priced in a loss by Sarkozy and despite French President elect Francois Hollande’s promises to renegotiate Sarkozy-condoned E.U. treaties.