Currency Weakens

Greece Eyes the Exit

Euro under pressure getty images
It's a big construction site.
  • Why it matters

    Why it matters

    The market reaction to Greece’s election on Sunday is a sign that Europe is better equipped to deal with political uncertainty.

  • Facts


    • The euro fell below 1.11 against the dollar on Sunday but by Monday morning had returned to levels seen on Friday, before the election results.
    • The European Central Bank has had a much bigger effect on markets than the Greek elections over the last few days, analysts said.
    • An increasing number of currency strategists are predicting the euro could reach parity with the dollar in coming years.
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Europe was plunged back into uncertainty on Monday after weekend election results in Greece saw a radical, anti-austerity party taking the reins of power for the first time since the euro currency zone plunged into crisis six years ago.

Together with the European Central Bank’s announcement that it will be launching a massive bond-buying program, the Greek elections helped push the value of the euro currency to an 11-year low against the dollar.

Many analysts expect the euro’s plunge to continue amid uncertainty over the future of the world’s largest currency bloc.

And yet, the news on Sunday wasn’t as bad as it could have been, some are arguing.

European markets largely took the Greek election result in their stride, a signal that Europe is perhaps now better equipped to deal with political uncertainty in the 19-nation currency bloc than three years ago when Greece teetered on default.

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