By Katie Martin
For a real sense of the relief running through the currencies market
Monday, don't look at the euro. Look at the rand.
The euro has crept very slightly higher on the news that the
pro-bailout New Democracy party has snagged first place in the Greek
elections over the weekend. The party still has a mountain to climb in
forming a government with third-place Pasok, but as far as traders are
concerned, at least the anti-bailout Syriza coalition didn't get in,
as that would crank up the chances of a Greek exit from the common
currency.
So, we have a so-called market-friendly result, but the euro has
climbed by only around half a cent since trading stopped on Friday.
That reflects nerves over the coalition-building coming up over the
next few days, and realism that no result can truly end the crisis. In
tandem, yields for the euro area's more troubled states have dipped,
but come nowhere close to collapsing.
But clear relief is to be found elsewhere, in the currencies that act
as the market's gauge of mood. The Hungarian forint, which had been
seen as one of the world's most vulnerable currencies to a nasty Greek
election result, has clearly jumped. The euro now stands at HUF291.25
against the forint, marking a climb of 0.7% for the Hungarian unit.
Similarly, the rand is 0.8% higher, with the dollar at ZAR8.28.
That, Morgan Stanley reckons, is a positive sign on investors'
interpretation of weekend events. The rally in riskier bets "has
further legs," the bank's analysts said in a note to clients Monday.
At 0705 GMT, the euro stood at $1.27, up from $1.2640 late in New York Friday.
Write to Katie Martin at katie.martin@dowjones.com
(END) Dow Jones Newswires
June 18, 2012 03:26 ET (07:26 GMT)
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