Euro slumps to Greek election results

Euro slumps to Greek election results

Monday, January 26, 2015 4:42 pm

Alexis Tsipras, leader of Greece's Syriza party

Alexis Tsipras, leader of Greece’s Syriza party

The euro slumped to an 11-year low against the dollar Monday after anti-austerity party Syriza won the Greek election, sparking fears the country could end up exiting the eurozone.

In Asian trading, the European single currency dived to $1.1098 — the lowest level since September 2003. It later recovered in European trade to $1.1251, up from $1.1208 late in New York on Friday.

European stocks mostly rose as investors assessed the outcome of the Greek vote against bright German economic data, and continued to react to last week’s European Central Bank quantitative easing (QE) stimulus plans.

Greece awoke to a new era of defiant anti-austerity after voters handed a decisive victory to radical left party Syriza, putting the country on a collision course with the EU and international creditors over its bailout.

“A new political dawn descended over Greece as Syriza swept to victory, forming a coalition with the help of the Independent Greeks party to fully secure an anti-bailout government,” said Connor Campbell, analyst at Spreadex trading group.

“However, the reaction from the markets was not as disastrous as it could have been.

“It appears that the strength of the QE… last week, and the lack of surprise at the Syriza victory, has allowed the eurozone indices to tentatively continue the rally that began last week.”

Stocks mixed

Frankfurt’s DAX 30 index of leading shares rose 0.78 percent to 10,732.65 points, aided by the Ifo institute’s closely watched business climate index, which rose to 106.7 in January from 105.5 points in December.

That was the third monthly rise in a row and was slightly higher than analysts’ expectations.

Elsewhere, the CAC 40 index in Paris won 0.10 percent to 4,645.36 points, while Madrid and Milan stocks gained 0.97 percent and 0.62 percent respectively.

On the downside, London’s FTSE 100 slid 0.24 percent to 6,816.73 points compared with Friday’s close, weighed down by the Greek news.

Athens stocks dived about 3.6 percent.

“The fact that Greece has voted against austerity is of little surprise, and European equity markets have managed to hold their own,” noted analyst Alastair McCaig at traders IG.

Syriza and its 40-year-old leader Alexis Tsipras won 149 seats in the 300-seat Greek parliament, just two short of an absolute majority, with most votes counted.

Syriza campaigned hard on renegotiating the EU-IMF bailout that imposed strict spending and taxation rules on Athens.

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