Euro Assets In Sell Signal

Investors sold risk assets like the euro, oil and stocks on Tuesday as Greece’s commitment to bailout pledges was put into question, adding to concerns over a possible Franco-German split on policies to tackle the region’s debt crisis.

The results of elections in Greece and France, in which voters soundly rejected austerity measures, heightened the uncertainty of the path ahead for the euro zone debt crisis.

Most European equity markets fell and Wall Street, which showed resilience on Monday, dropped in early trading.

Greek voters on Sunday punished the two mainstream parties for supporting the austerity conditions of a bailout. Alexis Tsipras, the leader of the Left Coalition party, said on T uesday Greece’s commitment to an EU/IMF rescue deal has become null since the elections.

Tsipras, who was given a mandate on Tuesday to form a government after his party came in second, said banks should come under state control and called for an international commission to investigate whether Greece’s debt is legal.

The euro was down 0.4 percent at $1.3006, off the previous day’s low of $1.2955, but briefly traded below $1.30 for a second straight day.

“The euro reacted to the Greece headlines, but the move lower has faded a bit because what (Tsipras) said was not so unexpected,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

Reuters

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