Euro is down across the board today, falling as concerns about what is happening in the eurozone weigh on financial markets around the world. The financial and political turmoil in the eurozone are causing trouble, and the euro is below the 1.30 level against the US dollar as a result.
Thanks to the political turmoil in the eurozone, financial markets are in upheaval today. While the eurozone will take some getting used to Francois Hollande, the new French president, there are more immediate issues pressing right now. It appears that Syriza will be unable to form a government in Greece. Next, tries to go to PASOK and then to the President. If none of these can form a government, new elections will be held. The uncertainty regarding Greece, and whether or not it will live up to its austerity agreements, has increased quite a bit. Additionally, there is speculation that Greece will leave the currency union.
On top of this, the situation in Spain continues to be precarious. 10-year bonds are once again pushing toward a 6% yield, indicating that Spain’s ability to meet its obligations and roll over its debt is in doubt. A Spanish crisis on the heels of the Greek crisis would not be good for the eurozone. As a result, it is little surprise that risk aversion is strong today.
At 13:49 GMT EUR/USD is down to 1.2942 from the open at 1.3007. EUR/GBP is down to 0.8044 from the open at 0.8049.
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