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| Euro hits 11-year low in wake of Greek election |
The euro hit an 11-year low versus the US dollar on Monday as Greece's anti-austerity Syriza party swept to victory in a snap election, putting Athens on a collision course with international lenders.
The single currency dropped to $US1.1098, a level not seen since September 2003, as official projections showed Syriza was set to win 149 seats in the 300-seat parliament, taking 36.3 per cent of the vote.
The euro fell to as low as ¥130.16, its lowest level in more than 11 years. The euro also fell against sterling, hitting a seven-year low of 74.06 pence.
In the near term, traders are looking to whether Syriza will secure an outright majority, which would raise the risk of a standoff with Greece's European lenders over austerity measures as well as the stance of Syriza leader Alexis Tsipras.
"Usually politicians say populistic things before an election. So now the question is how much they are going to stick to the promises made to the Troika," said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank.
Market participants saw the risk that euro selling would pick up during the Asian session if Syriza secures an outright majority.
Such a scenario could trigger a test of $US1.10, where large options lay, according to several research notes.
But some analysts also said long-term impact may be more nuanced as most investors expect Tsipras to work with the European Union and other international lenders at the end of the day.
"The market was largely anticipating a victory," said Sebastien Galy, senior foreign exchange analyst at Societe Generale in New York.
"At the moment, the market believes that if there is any (debt) restructuring it would only involve the official sector and for now, the possibility of Greece leaving the euro zone even with the incoming government is small," he added.
The euro also remained on the defensive after Thursday's announcement of quantitative easing by the European Central Bank.
It has sold off dramatically from $US1.21 at the start of the year and lost more then 3 per cent against the US dollar last week, in the wake of aggressive asset-buying measures announced by the ECB to shore up the region's struggling economy.
Losses in the single currency provided a broad boost to the US dollar, with dollar index rising to 95.186, near 11-year high of 95.331 hit on Friday.
Against the yen, which benefitted from safe-haven flows after Greek election, the dollar stood little changed at ¥117.77.
Meanwhile, the Aussie sank as low as $US0.7850, its lowest since mid-2009, while the kiwi fell to more than three-year trough of $0.7407.
Market participants saw the risk that euro selling would pick up during the Asian session if Syriza secures an outright majority.
Such a scenario could trigger a test of $US1.10, where large options lay, according to several research notes.
But some analysts also said long-term impact may be more nuanced as most investors expect Tsipras to work with the European Union and other international lenders at the end of the day.
"The market was largely anticipating a victory," said Sebastien Galy, senior foreign exchange analyst at Societe Generale in New York.
"At the moment, the market believes that if there is any (debt) restructuring it would only involve the official sector and for now, the possibility of Greece leaving the euro zone even with the incoming government is small," he added.
The euro also remained on the defensive after Thursday's announcement of quantitative easing by the European Central Bank.
It has sold off dramatically from $US1.21 at the start of the year and lost more then 3 per cent against the US dollar last week, in the wake of aggressive asset-buying measures announced by the ECB to shore up the region's struggling economy.
Losses in the single currency provided a broad boost to the US dollar, with dollar index rising to 95.186, near 11-year high of 95.331 hit on Friday.
Against the yen, which benefitted from safe-haven flows after Greek election, the dollar stood little changed at ¥117.77.
Meanwhile, the Aussie sank as low as $US0.7850, its lowest since mid-2009, while the kiwi fell to more than three-year trough of $0.7407.
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