Forex watches Euro hit 2006 low

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By Jacob Maslow

Euro - European Central Bank
FRANKFURT AM MAIN, GERMANY – MAY 14, 2014: Euro sign in front of the European Central Bank (Europaeische Zentral Bank)

Forex traders saw the Euro slip to a nine-year low against the dollar on Monday on the back of fears of a ‘managed exit’ by Greece after national polls late winter.

The Euro fell to levels not seen since 2006 as a reaction to German Chancellor Angela Merkel’s supposed comments over the weekend.

German magazine Der Spiegel suggested that, according to official sources, senior government officials, including the Chancellor, considered an exit by Greece from the euro zone will be manageable.

However, the government moved quickly to deny that view.

The report suggested Chancellor Merkel and Finance Minister Wolfgang Schaeuble believed the necessary reforms introduced since the 2012 Euro crisis would cope with a Greek exit.

It is unlikely, given enhanced efforts for reforms and European Stability Mechanism measures, there will any or only limited spillover effects to other countries facing funding problems.

However, politicians are still jittery about the Greek effect post-election results, particularly given news that anti-austerity party SYRIZA is rising ahead in the polls.

It has been suggested SYRIZA is leading conservatives from New Democracy by more than three points. The main question is how can a government be formed given the proportionality that kicks in at national elections.

On Monday, French President Francois Hollande said: “The Greeks are free to choose their own destiny. But, having said that, there are certain engagements that have been made, and all those must be of course respected.”

One spinoff for the forex industry will be increased volatility with the uncertainty surrounding Greece. That could also lead to new record

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