By Hiroyuki Kachi
The euro hit fresh lows against the dollar and the yen before
staging a rebound later in the session in choppy Asian trade
Monday, with the common currency coming under selling pressure due
to uncertainties in the eurozone after Sunday's Greek
elections.
Around 0450 GMT, the euro was at $1.1174, compared with $1.1208
late Friday in New York. The single currency touched as low as
$1.1098 -- its weakest level since Sept. 9, 2003 before stabilizing
to the latest level.
The euro also was at Y131.41 from Y132.08. That was higher than
its low of Y130.16 earlier the day, the lowest since Sept. 6,
2013.
Greek radical leftist party Syriza is set to win Sunday's
election with a government projection giving the antiausterity
party 150 seats in Greece's 300-seat parliament with the backing of
36.3% of voters in a fraught and historic national election that
could determine the country's future in the eurozone and
reverberate across Europe.
The initial currency market reaction was negative, with
investors selling the euro on uncertainties over the eurozone
situation. But having experienced massive selling and short
positions building up after the European Central Bank's decision
Thursday to go ahead with its massive asset purchasing program, the
euro was less immune to covering of investors' short-positions.
As the Greek vote count proceeds, the euro has been bought back
with short covering kicking in.
"We see volatile movements over the short term. It would not be
a surprise if the euro reaches $1.13," said Kenji Yoshii, FX
strategist at Mizuho Securities.
But Mr. Yoshii said the euro is vulnerable to fall back again
and test further downside as political developments unfold.
The result of the elections is expected to have lasting
repercussions for both Greece and the eurozone. Syriza, which
emerged as the main opposition party in mid-2012 at the depths of
the nation's debt crisis, has promised to tear up the austerity
program that Athens pledged in exchange for a EUR240 billion ($269
billion) bailout from international creditors.
"There will be no change that the euro remains top heavy," on
concerns about the Greek situation and given the ECB's massive
asset purchasing program, said FPG Securities chief executive Koji
Fukaya, adding that the euro could fall $1.10 over the
short-term.
Among other currency pairs, the dollar was at Y117.57 from
Y117.81 late Friday in New York, ahead of the closely-monitored
Federal Open Market Committee Tuesday and Wednesday.
The greenback also recouped its earlier losses, as jitters over
the Greek election diminished with the euro bouncing back from
fresh lows earlier in the morning.
The WSJ Dollar Index, a measure of the dollar against a basket
of major currencies, was up 0.16% at 85.54.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 117.56-57 117.77-78 -0.18 117.83 117.52 -1.80
EUR/USD Euro 1.1174-77 1.1204-07 -0.27 1.1206 1.1153 -7.63
GBP/USD U.K. 1.4997-5002 1.4989-94 +0.05 1.5018 1.4992 -3.72
USD/CHF Switzerland 0.8788-92 0.8804-08 -0.18 0.8817 0.8765 -11.60
USD/CAD Canada 1.2453-58 1.2420-25 +0.27 1.2460 1.2423 +7.18
AUD/USD Australia 0.7876-80 0.7911-15 -0.44 0.7913 0.7872 -3.59
NZD/USD New Zealand 0.7418-24 0.7449-55 -0.42 0.7452 0.7416 -4.80
Euro Rate
EUR/JPY Japan 131.35-39 131.97-02 -0.47 131.99 131.14 -9.36
Source: ICAP PLC
Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com