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Euro broadly lower as Greece political woes weigh

Published 05/08/2012, 06:20 AM
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Investing.com - The euro was broadly weaker against its major counterparts on Tuesday, as fears that political uncertainty in Greece could cause the debt crisis in the euro zone to deepen weighed on market sentiment.

During European late morning trade, the euro was down against the U.S. dollar, with EUR/USD shedding 0.23% to hit 1.3020.

The euro remained under broad selling after initial attempts by Greece’s largest party, New Democracy, to form a coalition government collapsed on Monday, following weekend elections.

Greek political leaders were continuing to hold cross party talks amid fears that the country will not have a government in place in time to secure its next tranche of international aid next month, as new elections look increasingly likely.

Investors were also jittery amid concerns over new French president-elect, Socialist Francois Hollande who has said he wants to renegotiate the euro zone’s fiscal pact in order to stimulate growth in the region.

The single currency was little changed after official data showed that German industrial production jumped 2.8% in March, easily surpassing expectations for a 0.8% increase, after declining in each of the previous three months.

The single currency eased against the pound but remained within striking distance of a three-and-a-half year low, with EUR/GBP edging up 0.11% to hit 0.8068.

The euro was hovering close to a two-and-a-half month low against the yen, with EUR/JPY losing 0.41% to hit 103.83, but remained little changed against the Swiss franc EUR/CHF dipping 0.02% to hit 1.2011.

Elsewhere, the shared currency was higher against the Canadian, Australian and New Zealand dollars, with EUR/CAD up 0.22% to hit 1.2989, EUR/AUD adding 0.43% to hit 1.2851 and EUR/NZD rising 0.47% to hit 1.6498.

Sentiment on the Australian dollar was hit earlier after official data showed that the country posted its third consecutive monthly trade deficit in March, as commodity exports continued to decline.

Later Tuesday, European Central Bank President Mario Draghi was due to speak in Frankfurt.

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