Australian Dollar rises on Greece election news

THE Australian dollar and other risk-sensitive currencies have seen gains over the weekend as markets adjust to election results in Greece.

News that Greece’s conservative New Democracy party is set to form a pro-bail-out coalition government following Sunday’s ballot re-run, fuelled the initial movement as fears of a Greek Euro exit abate.

The rally dampened early Monday morning though as relief over the election results gave way to renewed caution, with the reality that the new coalition government may be short lived.

The New Democratic Party has entered into informal talks with the Socialist Pasok party.  An announcement is expected on Wednesday signalling the Coalition agreement between the two parties.

The Australian Dollar was trading at 0.797 Euro in Monday morning trading at 0.641 British Pounds.

Market sentiment seems to be that the Australian Dollar will remain relatively range bound over the next few days as markets eagerly await news of the coalition negotiations in Athens. However, Alex Sinton, a trader for ANZ, was cited as saying that whilst the election results have kept Greece open to the possibility of remaining within the Eurozone, there is still a lot that must be fixed. He pointed out the election itself has fixed nothing.

GBP/AUD: 1.5583
EUR/AUD: 1.2531
AUD/USD: 1.008
AUD/JPY: 79.388

Exchange Rates at 08:49, 18 June 2012

:: Note: The above exchange rates are based on “interbank” rates.

Composed by Monique Chapman of 1st Contact.

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