Australian Dollar Lifts But Europe Concerns Remain

Australian Dollar Lifts But Europe Concerns Remain

The Australian dollar was higher today, rallying to a one-month high, as markets were seemingly happy with the news that the pro-bailout party, the New Democracy party saw a narrow victory in the Greek elections, lowering the changes of Greece exiting the Eurozone.  In late local trade, the dollar was buying 101.14 US cents up from 100.16 US cents on Friday. It rose to 80.17 Japanese yen, up from 79.05 yen on Friday and 79.72 euro cents, up from 79.36 euro cents. Australian share market also gained 2% today as relieved investors bought mining stocks following the elections.

However, policymakers raised concerns that there was still a long way to go before the political and economic uncertainty in Europe was resolved. Fears are mounting that a new government in Athens could be short-lived.

Jon Horner, from Deutsche Bank said that Greece’s election result helped to alleviate the near-term risks, “The medium-term questions remain very much in place.” He also added that there were still, “many questions over Greece’s ability to adhere to the European Union bailout package it has signed up for and the very real economic weakness that its economy is facing.”