Forex Asia Review – Euro rallies after Greece election results

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Euro jumped higher against the dollar to open the Asian session with a gap after news late on Sunday that elections results in Greece were enough to calm market fears of the country’s exit from the euro zone. Pro-bailout parties won enough seats in parliament to form a government. The New Democracy Party took the lead and will be forming a government with PASOK party.

 

The outcome of the Greek vote outcome downgraded fears of the euro zone debt crisis spiralling out of control.  Before the Greek elections, the euro was under pressure as investors feared a disorderly exit of Greece from the single currency bloc. There were concerns that if the anti-bailout party, Syriza, won the elections, Greece would have reneged on the terms of the EU/IMF bailout.

 

 

EURUSD opened in Asia with a gap at 1.2699 compared to Friday’s close of 1.2636. The pair rose to a one-month high of 1.2746 early in the session as risk appetite was lifted by the Greek election results.

 

 

GBPUSD hit an early high of 1.5738, while EURGBP jumped 0.6 percent from Friday’s close to hit  0.8082 as euro jumped across the board after the news from Greece.

 

 

Yen weakened as demand for safe havens declined following the Greek elections. USDJPY rose to 79.28 versus Friday’s close of 78.67. Meanwhile, EURJPY is back above the key 100.00 yen level, hitting a high of 100.82 in early Asian hours as euro rallied across the board.

 

The Australian dollar gapped higher against the U.S. dollar as Asian bourses rallied on the news from Europe. AUDUSD hit a one-month high of 1.0133.

 

Looking ahead, the economic calendar is light this Monday. With no major economic data, markets will take direction from headline news. Risk appetite will likely remain sustained.