Euro Falls as Greece Continues to Wrangle

Greek political leaders continue to wrangle in an effort to form a government, and that is weighing on the euro, especially against the US dollar. Yesterday, the euro showed some spunk, and riskier assets received a bit of a boost. Today, though, risk aversion is back in full force over Greece, and over the latest news from JP Morgan Chase.

In Greece, the political wrangling continues. Political leaders differ on what they think will happen, with some insisting that a government can be formed, while others say that it’s likely that Greek citizens will be headed back to the polls. The uncertainty about what is happening in Greece — and whether or not the eurozone will be able to overcome its woes — once again weighs on the euro.
Also contributing to a climate of risk aversion today is the fact that JP Morgan Chase has seen huge losses. The bank is blaming the losses on a trader known as the “London Whale.” The losses amounted to more than $2 billion, and is being attributed to a credit derivatives strategy gone bad. The news is weighing on risk appetite in general, and that is sending Forex traders to the stability of low beta currencies.
At 12:58 GMT EUR/USD is down to 1.2923 from the open at 1.2936. EUR/GBP is up to 0.8039 from the open at 0.8012. EUR/JPY is down to 103.2255 from the open at 103.3970.

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