Euro slumps on Greece

US dollar resilience has remained a key theme with the dollar index continuing to hold its ground above 90.

Euro
Source: Bloomberg

As we head towards the end of the year, data also starts to wind down but this doesn’t seem like it will faze US dollar bulls. Another factor that continues to work well for US dollar bulls is the policy divergence between the US and its major peers. Europe will be particularly interesting in the coming weeks and uncertainty around Greece will bring the single currency to the fore. EUR/USD traded at its lowest since July 2010 after Greece failed to elect a president which will now see the country hold early elections in January. While many would have expected further losses for the euro, the result was largely expected. The difference now will come from what the polls say about a victor for the elections. Traders should consider selling bounces in EUR/USD with potential targets to July 2010 lows in the $1.2043 region.

Click to enlarge

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.