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Forex - Greek, French elections drive EUR/USD to 3 month low

Published 05/07/2012, 11:51 AM
Updated 05/07/2012, 11:52 AM
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Investing.com - The euro traded sharply lower against the U.S. dollar Monday, as French voters elected anti austerity socialist Francois Hollande and Greek voters supported anti bailout candidates fuelling fresh concerns over Europe’s ability to resolve the debt crisis.

EUR/USD bounced from 1.2956, the pair’s lowest since January 25, to hit 1.3052 during U.S. afternoon trade,  down 0.25% on the session.

The pair was likely to find support at 1.2956, the session low and a three-month low and resistance at 1.3079, Friday’s low.

The euro bounced after a sharp decline earlier in the session as the weekend Greek election increased doubts of the country complying with the bailout criteria and fuelled fears of a Greek exit from the euro zone.

Neither of the country’s two pro-bailout parties secured enough votes to form a government, as voters favored smaller parties who campaigned against harsh austerity measures.

In France, President Nicolas Sarkozy was defeated by socialist candidate François Hollande, who has been critical of the country's austerity program.

Meanwhile, fears that the U.S. economic recovery is losing momentum continued to linger after Friday’s disappointing jobs data.

Official data indicated that the U.S. economy added 115,000 jobs in last month, far short of expectations for a 170,000 increase, after adding an upwardly revised 154,000 jobs in March.

The euro was trading within striking distance of a three-and-a-half year low against the pound, with EUR/GBP down 0.52% to hit 0.8060 and was also lower against the yen, with EUR/JPY losing 0.23% to hit 104.23.

Trading volumes were expected to remain light on Monday as markets in the U.K. were closed for a bank holiday.



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