Forex - EUR/USD up on polls showing Greek support for euro

Published 05/27/2012, 07:57 PM
Updated 05/27/2012, 07:59 PM
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Investing.com - The euro rose against the U.S. dollar on Monday on poll results showing Greeks may be growing more in favor of sticking with the euro, even with the austerity measures that come with it.

In Asian trading on Monday, EUR/USD was trading up 0.43% at 1.2570, up from a session low of 1.2563, and off from a high of 1.2579.

The pair was likely to test support at 1.2516, the low of May 24, and resistance at 1.2815, the high of May 22.

Polls hitting the wire in Greece show voters are favoring the more established and more conservative political parties in favor of sticking with the euro even if it means adhering to belt-tightening measures such as tax hikes and spending cuts that come with it.

Conservative pro-bailout New Democracy has seen its popularity rise in the polls ahead of June 17 parliamentary elections, followed by the leftist Syriza, which opposed austerity measures.

Some say results show New Democracy could garner enough votes to team up with its socialist ally PASOK and patch together a coalition government.

Elections held on May 6  saw the more radical Syriza gain ground, which refused to negotiate with other political parties to form a coalition government, thus resulting in a June 17 ballot to end the standoff.

Hopes that a coalition government willing to work with European countries to find a way out of the debt crisis sent the euro climbing.

The pair declined in recent sessions over fears the European debt crisis was heating up anew in Spain, where reports emerged that the Bankia financial institution will ask the government for fresh bailout funding.

Also in Spain, calls from the regional Catalonian government for Madrid for help refinance its debts also pushed the euro down to near two-year lows before rebounding in Asian trading on Monday.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP up 0.29% at 0.8014 and EUR/JPY trading up 0.38% at 100.11.

U.S. markets will be closed on Monday.

On Tuesday, The U.S. Conference Board's consumer confidence index will hit the wire, while in Europe, German inflation data and Spanish retails sales figures will publish as well.

Markets will keep an eye down the road to Friday's U.S. jobs report.

Worse-than-expected unemployment data could weaken the dollar by fueling talk the Federal Reserve will stimulate the economy via monetary easing.







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