Asian markets begun the trading week boosted by renewed hope that Greece’s pro-bailout political party is gaining ground in the polls ahead of June 17 parliamentary elections, reducing concerns that Greece may heading for an Euro exit. Conservative Greek political party New Democracy has been steadily increasing in the polls, indicating that the Greeks want to stay with the euro. Previously, expectations that the leftist Syriza party would do well in the 17th June parliamentary elections on a stand of rejecting the bailout terms have sent shockwaves around world markets. The positivity that is surrounding Greece managed to shrug off Lloyds of London, who stated that they are prepared for a greek exit and the riling of Greeks, incensed by IMF head Christine Lagarde suggesting that the Greek people were avoiding paying tax.
The optimism that Greece may yet avoid an exit from the eurozone sent stocks higher early in the session – Hong Kong’s Hang Seng Index increased 0.16%, Australia’s S&P/ASX200 gained 0.66%, whilst Japan’s Nikkei 225 Index increased by 0.08%. In currency news, the EUR made significant gains against the USD – up 0.61%, trading at 1.2592. The EUR was also up against the Swissie, increasing 0.07%, trading at 1.2020.
The USD fell against most major currencies as the Greek optimism sparked an appetite for risk. The US Dollar index, which measures the greenback against a basket of 6 weighted currencies, was down 0.54%, valuing the USD at 82.08. Against the JPY, the USD was down 0.34 but it was against the commodity linked AUD that saw the USD make the biggest declines – down 0.98%.
Today is a holiday in the US and Switzerland which generally lowers levels of trading and don’t expect too much bounce on the USD when European markets open. Italian business confidence data is published at 8am GMT, but investor focus will be on unemployment, retail sales and household spending figures released in Japan later in the evening.
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