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26 Jan 2015
EUR/USD: Half a cent lower at 1.1150, Syriza's victory weighs
FXStreet (Bali) - EUR/USD is trading under pressure in early Asia, with a down-gap in retail platforms of over 50 pips as newswires confirm a landslide victory for Greece's anti-austerity Syriza party, with an absolute majority still a potential outcome, although it may still take hours to confirm this last piece of the Greek election puzzle.
The selling of Euros in the early going of Asian trade is a reflection of market's fear for a possible exit of Greece from the Eurozone, even if such scenario is still not an imminent outcome of a Syriza's-led government, as some tough negotiations with European partners in order to reach compromises in the weeks/months ahead are first expected. Besides, it is worth reminding traders that the vast majority of Greek population still want to remain in the euro, with the latest polls showing over 76% earlier in January.
While a Grexit looks today more financially viable in both fronts, with the Greek's worst economic times seemingly behind, and Europe admitting that an exclusion of Greece as part of the Eurozone is now manageable, it would still be a lot more painful for Greece than the Eurozone, that is why, as Raoul Ruparel, Head of Economic Research at Open Europe, notes that "Greece is unlikely to unilaterally leave the euro" although the thin ground for compromise means that the negotiations will be particularly tricky and that a Grexit, while unlikely, cannot be ruled out at this stage."
The selling of Euros in the early going of Asian trade is a reflection of market's fear for a possible exit of Greece from the Eurozone, even if such scenario is still not an imminent outcome of a Syriza's-led government, as some tough negotiations with European partners in order to reach compromises in the weeks/months ahead are first expected. Besides, it is worth reminding traders that the vast majority of Greek population still want to remain in the euro, with the latest polls showing over 76% earlier in January.
While a Grexit looks today more financially viable in both fronts, with the Greek's worst economic times seemingly behind, and Europe admitting that an exclusion of Greece as part of the Eurozone is now manageable, it would still be a lot more painful for Greece than the Eurozone, that is why, as Raoul Ruparel, Head of Economic Research at Open Europe, notes that "Greece is unlikely to unilaterally leave the euro" although the thin ground for compromise means that the negotiations will be particularly tricky and that a Grexit, while unlikely, cannot be ruled out at this stage."