BIG NEWS! EURO TUMBLES
Euro tumbles on Greek vote results, approaches 11-year low
(Reuters) - The euro weakened on Monday, approaching an 11-year low versus the U.S. dollar after projections showed Greece's Syriza party had won a snap election, raising the risk that the country may demand a debt write-off and end austerity measures.
The single currency fell more than half a cent to around $1.1140 in early Australasian trade after official projections showed the leftist party poised to take 149-151 seats in the country's 300-seat parliament.
The euro slipped to around 130.97 yen, coming within a whisker of a 16-month low around 130.90 yen hit late last week.
By 3 p.m. ET, the euro traded around $1.1160 after its sell-off fizzed out ahead of $1.1115 plumbed on Friday, its weakest since September 2003. It was unclear whether Syriza had secured an outright majority, which would raise the risk of a standoff with Greece's European lenders over austerity measures.
"The market was largely anticipating a victory," said Sebastien Galy, senior foreign exchange analyst at Societe Generale in New York, adding that the selling was driven by stop-loss orders triggered below $1.12 in holiday-thinned trade in Australia and much of New Zealand.
"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.
But market participants saw the risk that euro selling would pick up during the Asian session, adding that the single currency may plumb a fresh 11-year low if Syriza secures an outright majority.
Such a scenario could trigger a test of $1.10, where large options lay, according to several research notes.
The euro has sold off dramatically, dropping from $1.21 at the start of the year and losing more then 3 percent against the U.S. dollar last week, in the wake of aggressive asset-buying measures announced by the European Central Bank to shore up the region's struggling economy.
Losses in the single currency provided a broad boost to the U.S. dollar, which rose to 117.50 yen and knocked the Australian and New Zealand dollars to multi-year lows.
The Aussie sank as low as $0.7850, its lowest since mid-2009, while the kiwi fell to three-year trough of $0.7422.
You better believe this volatility will create record business for FXCM. Everyone will be in on the FOREX action! How else can this help FXCM rolling into monday?
