Euro On A Low Note

2018 has been a disappointing year for the euro. After hovering around 1.4000 in May, the currency dipped more than 13.3% against the dollar, slipping to a two-year low. Earlier this week, European stocks reflected little of the impact of the long-awaited final round of Greek presidential voting by the parliamentary body.

Trading has remained stagnant during this week due to the holiday season, with most dealers and investors having closed their positions for the year. Trading is likely to pick up pace on January 5, when the markets are restored.

Greece dissolved its parliament today after Greece Prime Minister, Antonis Samaras, failed to gather support for his presidential nominee, Stavros Dimas. Mr. Dimas failed to acquire the necessary 180 votes to secure his position.

This could be a huge setback for the eurozone countries that have been working with Greece to pay off its debts. The country could also potentially lose out on its 240 billion euros ($292 billion) IMF bailout contract, which leftist Syriza party has called to be annulled.

“The Greek vote should be something to watch out as a risk factor. Improving fundamentals in the U.S. and speculation of fresh monetary easing by the ECB could lift global stock markets further,” said Junichi Ishikawa, an analyst at IG Markets in Tokyo.

The Euro STOXX 50 index has seen slight gains in 2014, with the blue-chip index up only 1.15%, trading at an estimated price to earnings multiple of 14.4x, a discount of 9.4% to the Dow Jones Industrial Average.

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