Anti-austerity coalition government formed in Greece – BTMU

FXStreet Team FXStreet

FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, comments that the formation of the anti-austerity coalition in Greece poses further downside risks for the euro.

Key Quotes

“The euro has continued to stabilize at lower levels in the Asian trading session following the Greek election over the weekend. The euro is on course to record one of its largest percentage monthly declines on record since it was introduced with EUR/USD currently standing around 7% lower during January.”

“Heightened political risk in the euro-zone and more aggressive monetary easing from the ECB are mainly responsible for acute euro weakness which appears justified.”

“Having said that recent negative developments are now more adequately discounted in the current lower value of the euro which without fresh triggers may begin to gradually lose some downward momentum in the coming months.”

“Syriza has quickly formed a coalition government with the Independent Greeks. The new ruling coalition government will control 162 seats, of which 149 are held by Syriza and 13 by the Independent Greeks.”

“The parties are united in their shared stance that Greece against austerity measures and in seeking a debt write-off.”

“The formation of the new government sets the stage for more difficult relations with Greece’s international creditors posing downside risks for the euro.”

Author

FXStreet Team

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