The Euro to US Dollar (EUR/USD) exchange rate firmed from its lowest level in 11-years on Monday as economist speculate that Syriza’s Greek election victory would not be a threat to the wider Eurozone.
The Euro to US Dollar exchange rate hit a session high of 1.126
Hopes that a compromise will be reached between Greece’s new Prime Minister Alexis Tsipras and the Troika over austerity and bailout terms led to the Euro shaking off earlier losses and rally against the majority of its most traded peers.
The Troika of lenders that bailed out Greece includes the European Union (EU), European Central Bank (ECB), and International Monetary Fund (IMF) – imposed big budgetary cuts and restructuring in return for the money. The austerity messages imposed on the nation led to unemployment soaring to more than 25%.
‘The new Greek government will be ready to co-operate and negotiate for the first time with our peers a just, mutually beneficial and viable solution. The troika for Greece is the thing of the past,’ Mr Tsipras said.
The Euro’s rally could be short-lived however as the Germans responded to Syriza’s victory by stating that German government will not grant debt relief to Greece.
The IMF has also said that it cannot give special treatment to Greece. One thing is for certain, Tspiras is going to have a fight on his hands to get what he wants for his country.
‘There are internal Eurozone rules to be respected. We cannot make special categories for such or such country. It’s not a question of austerity measures, these are in-depth reforms that remain to be done,’ said Christine Lagarde, the head of the IMF.
German Confidence Supports Euro Exchange Rate
The Euro also received support from the release of data which showed that business confidence in the Eurozone’s largest economy increased for a third consecutive month as falling energy prices and anticipation that the ECB’s €1 trillion quantitative easing programme will assist a Eurozone economic recovery.
According to the Ifo institute its business climate index rose more than forecast in January to a figure of 106.7. The preceding months figure was 105.5 and economists had been expecting a number of 106.3.
The main event for the US Dollar this week will be the wealth of data released on Tuesday and Wednesday’s Federal Reserve Interest Decision.
Euro Exchange Rate News:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.1245 ,
Euro,,British Pound,0.7483 ,
Euro,,Australian Dollar,1.4188 ,
Euro,,Canadian Dollar,1.3995 ,