World markets are open again and in the wake of radical left wing party Syriza’s landslide victory in Greece’s parliamentary elections, the euro is getting slammed.
Near 7:00 pm ET on Sunday night in New York, the euro was down to as low as 1.1112 against the US dollar, a new 11-year low for the currency which was slammed last week after the European Central Bank announced a new quantitative easing program.
US stocks futures were also lower on Sunday night as was the price of oil, with West Texas Intermediate crude as much as 2.5% to $US44.45 a barrel.
Over the last six months, as eurozone inflation has tumbled and economic growth has flagged, the euro has weakened against the dollar in anticipation of policy easing from the ECB.
Syriza leader Alexis Tsipras, who appears set to take the reins as Greece’s prime minister at just 40 years old, ran on a platform of rejecting the austerity measures that were placed on Greece during the eurozone crisis.
Following Syriza’s victory, some have asked if this opens the door for a “Grexit,” or a move for Greece to leave the European Union.
In a note to clients on Sunday night, Claus Vistesen at Pantheon Macroeconomics wrote, “Our base case remains that Syriza will make life difficult for the Troika, but also that the risks of a Grexit remain low, even if Syriza is able to form a majority government unconstrained by other parties.”
But in immediate reaction to Syriza’s victory, the euro is selling off as market’s digest the implications of Syriza’s victory.