If parliament approved the austerity plan, the EU and the IMF will approve aid package for Greece. New Democracy Party and its coalition partner ecpectation narrowly won over the budget plan so as to secure the position of Greece in the euro zone at least for a while. Observed so far pairing EURUSD fell -0.44% at 1.2778, after reaching its lowest point at 1.2768 and intraday high levels daily at 1.2841.
Anxiety Greece is still a major factor dragging down EURUSD today, even likely fall into the range of 1:24 to 1:27 until the end of the year. Opportunities rise EURUSD likely triggered by profit-taking if Obama won re-election of U.S. President Tuesday.
Greece Euro Anxious to Get Help
The euro fell to its lowest level in nearly 8 weeks against the dollar on speculation Greece will be difficult to get a bailout fund, the risk for the future of Greece in the euro bloc. The euro weakened against all major currencies after Greek Prime Minister Antonis Samaras yesterday promised that the salary and pension cuts it proposes will be the last as he tried to gain political support for policies that would ensure the sustainability of Greek sovereign. “All the negative factors lining up for the euro,” said Neil Mellor, a strategic foreign currency strategist at Bank of New York Mellon Corp.. in London. “It remains unclear how the voting will take place and we are still not sure if the voting was going well will have a positive impact for Greece and the euro zone.”
Forex Still Focused On U.S. Elections
The foreign exchange market this week’s U.S. presidential election fell on a Tuesday, which helped determine the outcome of the election is the fate of the fiscal gap, government regulations and policies of the Fed going forward. Issues fiscal gap consists of government spending programs and tax cuts are scheduled to expire at the end of this year, has the potential to send the U.S. economy back on track recession if U.S. policy makers failed to reach agreement draw up new laws.
Presidential and legislative election results this time certainly can determine the U.S. fiscal gap debate, but whoever the winner of the U.S. Presidential candidates deadlock in the legislature a more important role with fluctuations in major currencies. In addition, the results of the U.S. elections could also impact on the direction of the U.S. central bank’s monetary policy, which has so far made a purchase of bonds and weaken the U.S. dollar due to higher supply-related dollar stimulus, it is likely to reverse direction if Mitt Romney was elected, as he give signal that would be The Fed’s new governor is a more aggressive in tightening monetary policy rather than monetary easing at this time. Furthermore bergesr also focus on ECB monetary policy meeting on Thursday, although there has been no change in monetary policy expectations, but investors are still waiting for confirmation bailout Spain.
Some Uncertainties haunt Euro
The euro sank to its lowest in nearly two-month high versus the U.S. dollar on Monday as uncertainty about the outbreak of the next disbursement of bailout for Greece stage. Investors also look extra cautious ahead of the U.S. presidential election on Tuesday. EURUSD is currently offered in the range of 1.2785 or about 0.2% below the closing price on Friday, after touching the lowest level at 1.2777 daily. Concerns over Greece weigh on the currency the 17-nation bloc earlier this week, ahead of the parliamentary vote on the plan of tax increases and cuts in new budget required by Troika. Failure to meet these requirements will threaten bailout next stage, which is indispensable Athens to avoid bankruptcy.
“Some traders seem to also start looking further indication of the weakening euro, after trading in the range of 1:28 to 1:32 that has curb euro since mid-September,” said Michael Derks, chief strategist at FxPro. “Dollar bullish movement also needs to be addressed with care, Obama’s victory is likely to trigger some profit taking on Wednesday.” U.S. Presidential election process will begin on Tuesday, the latest poll shows support for the thin sound differences between President Barack Obama and Mitt Romney.