Posted on May 7, 2012 by Trading Point Investment Research Desk at 8:08 pm GMT
The euro fell sharply today, touching its lowest level against the dollar since January in reaction to results of elections in France and Greece causing political uncertainty in the euro zone. Both countries voted for anti-austerity parties. EURUSD fell to 1.2953 but soon trimmed losses to rebound to 1.3063 in late US trading session. The single currency remains vulnerable since Greece has yet to form a coalition government after failed attempts today by the conservative party. All eyes are on Greece, for if they do not form a government within the next two weeks new elections will be called, and the bailout from the IMF/EU is at risk.
Cable tracked the EURUSD in light trading on Monday since the U.K. markets were closed for a public holiday. GBPUSD bounced from 1.6113 to 1.6195 in the US session but is vulnerable to downside pressure.
The dollar rose to a seven-week high against the Swiss franc in a knee-jerk reaction to the weekend elections news. USDCHF surged to 0.9269 in early Asian trading hours before easing to 0.9193 by the end of the day.
The dollar traded back above 79.80 yen in the US session from 79.62 yen earlier in the day. EURJPY rose as euro rose across the board, climbing to 104.43 from 103.19.
The Canadian dollar recovered by the end of the day after tumbling to its lowest level in almost three weeks against the US dollar after anti-austerity election results in Europe renewed concerns on the euro zone debt crisis. By the start of the US session world markets took political upheaval in Europe largely in stride, with the euro recovering from sharp losses and equity markets up. Also, crude oil, a major Canadian export, recovered from earlier lows, helping lift the loonie. USDCAD fell back to 0.9925 from 0.9985.
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