Anti-austerity the name of the game?

Looking, importantly, to Greece first where elections there were dominated by a win by the anti-austerity party, Syriza who now pose the real chance that Greece will willing default on their bailout repayments. This comes at about the same time that the Eurozone was injected with a €1trillion bailout by way of quantitative easing. This all resulted in EUR trading at 7 year lows against the British pound, and 11 year low against the US dollar. Now the markets will wait and see what happens this week – the one saving grace might be that Syriza require a coalition partner to govern now so many in Europe will be hoping that some sense might prevail and the debt not be defaulted on if coalition partners are unwilling on an exit from the Commonality.

In the UK, things were more of the same with the MPC voting to keep the interest rate on hold at 0.5% (as expected?). Unemployment was seen to dip to a six year low of 5.8%, with salaries on the rise, and retail sales (which are always a good indicator of economic health) rose to 4.3%, beating expectations of 3%.

In the US, the dollar continued its strong trajectory although the Fed was keen to point out that a stronger Greenback would not infringe on US exports/economy – no “currency wars” will be seen, and the Federal Reserve Bank won’t be swayed into not raising interest rates at some point as planned. With the Europe’s on-goings, though, it is a matter of basically seeing what transpires there and the knock-on effect it will have for the dollar and pound (in all likelihood, more strengthening).