By TraderVox.com
Tradervox (Dublin) – Risk appetite declined in the market as election results from France and Greece elicited concerns that the region will encounter difficulties in implementing austerity measures. The Australian and New Zealand dollars fell amid these concerns as risk appetite declined.
The Aussie dropped to the weakest this year against the US dollar after France election results were announced declaring Francios Hollande the new French president defeating pro-bailout and pro-austerity incumbent president Surkozy. In Greece, anti-bailout parties gained momentum hence compounding the sovereign debt crisis resolve efforts. The effects of the elections in Europe could not be counseled by positive domestic reports showing gains in Retail Sales and Building Approvals. Its counterpart, the New Zealand dollar, fell against the US dollar and the Yen as Asian stocks continued with a global rout.
According to Senior Currency Strategist, Sean Callow, of Westpac Banking Corp, the election results from Europe may bring the next wave of instability in the region as voters express there rejection of the austerity measures. He also said that the Kiwi and Aussie are expected to remain under pressure as this crisis continues. Francios Hollande got about 52 percent of the votes against 48 percent of the incumbent Nicolas Sarkozy. In Greece, the New Democracy and the Socialist Party, which are the two parties that secured a second bailout for Greece, are expected to be defeated in the election falling short of 151 seats needed to win a majority.
The Aussie fell by 0.4 percent against the dollar to trade at $1.0142, after it had touched this year’s lowest of $1.0110, which was last registered in December 29 last year. The Australian dollar is set for its longest spell of daily decline as it goes for the sixth day. The Aussie lost 0.4 percent against the yen to trade at 80.95 yen after touching 80.57, the lowest since January 30.
The kiwi declined to 79.07 US cents, it lowest since January 13, before trading 0.4 percent lower than May 4 close at 79.25. The kiwi was 0.5 percent down against the yen to trade at 63.24 yen.
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