Forex Asia Review – Euro falls after French and Greek elections results rattle markets

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Euro fell against its major counterparts after the French and Greek elections results brought uncertainty in the markets due to concerns that austerity efforts in Europe may be derailed. Socialist Hollande defeated incumbent Nicolas Sarkozy to win the French presidential election with 52 percent of the vote against 48 percent for Sarkozy. Hollande is said to oppose German Chancellor Merkel’s policies for fiscal unity in the euro zone. Meanwhile in Greece, voters voted for parties that opposed austerity measures, putting at risk the Greek bailout plan.

 

EURUSD gapped lower in the Asian session, opening at 1.3011 versus the close of 1.3081 on Friday. The pair fell to a 3-1/2 month low of 1.2953 where it found support.

 

EURGBP fell to the lowest level in over three years. The pair opened in Asia at 0.8059, gapping down from Friday’s close of  0.8098, and tumbled to 0.8033, the lowest since November 2008.

 

GBPUSD tracked the EURUSD to fall in the Asian session to 1.6113, down from Friday’s 1.6150. Volumes were light due to UK markets closed for a public holiday this Monday.

 

Yen remained firm on safe haven flows in a risk-off market . EURJPY fell to a 2-1/2-month low of 103.19. USDJPY dipped early to 79.62 as dollar weakness prevailed following weak US non-farm payroll numbers from Friday.

 

The Australian dollar fell further against the US dollar due to risk aversion. AUDUSD fell to as low as 1.0109, its low so far this year. Some positive Australian retail sales data building approvals data helped aussie recover slightly from lows.