Euro vs Australian Dollar (FX:EURAUD)
2 Years : From May 2011 to May 2013
In early European deals on Monday, the Australian and New Zealand dollars are extending their previous session's slide against most major currencies on growing concerns about the Eurozone debt crisis.
Risk aversion grew after Greece's political parties failed in their latest efforts to form a coalition government and Chancellor Angela Merkel's conservatives suffered a stinging defeat in the North Rhine-Westphalia state elections on Sunday.
Greece appears to be heading towards fresh elections after the far-left Syriza party indicated that it will not participate in further negotiations aimed at forming a coalition government in the wake of last week's indecisive elections.
Syriza party leader Alexis Tsipras reportedly insisted that his party will not participate in coalition negotiations with other Greek political parties that back earlier deals reached with the troika of international creditors, namely the European Union, European Central Bank (ECB) and the International Monetary Fund (IMF), in exchange for bailout loans.
With the Syriza opting to stay away from the negotiations, the center-right New Democracy, the socialist Pasok as well as the Democratic Left, a more moderate leftist party, are expected to attend the talks at the presidential mansion to try and form a coalition government to avoid fresh elections that are expected to be announced later this week.
Such a development would lead to weeks of uncertainty in the eurozone over Greece's continued membership in the single currency zone. At a meeting in Brussels later today, eurozone finance ministers are likely to increase pressure on Greece to continue with austerity and structural measures.
The New Zealand dollar is trading at a 10-day low of 1.6567 against the euro and a fresh 4-month low of 0.7769 against the US dollar, compared to Friday's close of 1.6494 and 0.7831, respectively. The next downside target level for the kiwi is seen at 1.70 against the euro and 0.770 against the greenback.
Against the Japanese yen, the New Zealand dollar is trading at a 5-day low of 62.21. If the kiwi-yen pair weakens further, it will fall below 62 level. At Friday's close, the kiwi-yen pair was quoted at 62.60.
The Australian dollar also declined, hitting a 10-day low of 1.2920 against the euro and a 5-day low of 79.79 against the yen. On the downside,the aussie may 1.30 target against the euro and 79.0 against the yen. The euro-aussie and the aussie-yen pairs were worth 1.2897 and 80.12, respectively at Friday's close.
Meanwhile, the Australian dollar continued to fall below parity against the U.S. dollar for the first time since December 2011.The aussie-greenback pair is now trading at 0.9965 with 0.990 seen as the next downside target level. The pair ended last week's trading at 1.0024.