Early Asian trading has indicated that the fears over the political turmoil in Greece still reign supreme as the Dollar continues to find favour as the safe haven currency to go and the Euro continues to be sold.
It was announced in Greece yesterday that the leader of far-left party Syriza will not attend coalition talks today (Monday), pushing Greece into further political turmoil. The move takes much maligned Greece a step closer to elections – with polls now suggesting the anti-bailout party may win. President Karolos Papoulias had invited four parties, including Syriza, to further talks but Mr Tsipras, the leader of the far left, ruled out any deal with pro-bailout parties. Both the centre-right New Democracy and the socialist Pasok have been unable so far to form a new coalition government with both agreeing to wide ranging cuts in return for the last EU/IMF bailout, but both suffered in last week’s elections. Syriza, which finished 2nd in the polls, insists any new government must cancel austerity agreements in return for EU-IMF loans worth 130 billion euros .
The US Dollar index, which measures the USD against a basked of 6 weighted currencies was up at time of writing – gaining 0.17%, valuing the USD at 80.56. The AUD dropped against its U.S. cousin, briefly falling below parity for the first time since December 2011, as investors piled into greenbacks and select Asian equities, abandoning the AUD and the EUR in the process. In the EUR/USD pairing, the EUR was down 0.21%, trading at 1.2890, whilst the strengthened greenback meant a decline in the value of commodities. Gold was down 0.16%, trading at 1581.35 a troy ounce and Silver was down 0.39%, trading at 28.773.
This morning looks to be another busy day on the trading front with a raft of economic data coming from Europe including French, Spanish, German and Italian debt auctions. In particular keep an eye on the Italian 10 year debt auction for increased volatility in the markets.
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