FXStreet (Mumbai) – The euro was heavily sold-off, kicking-off Asia nearly 2% lower following the Greek referendum results which reflected that Greek voters said a resounding around 60% ‘No’ vote to further austerity imposed by the country’s creditors in the referendum on Sunday. While risk-off moods backed worries over Greece’s future in Euro zone dominated across the Fx board with most Asian pairs relatively lower.
Key headlines in Asia
Greek referendum: ‘No’ voters celebrate victory
Nikkei leads Asian stocks lower, flight to safety on Greece weigh
ECB may tighten collateral requirements to Greek banks – ANZ
Australia ANZ Job Advertisements rose from previous 0% to 1.3% in June
Dominating themes in Asia – centered on JPY, AUD, NZD
Greek referendum results stole the show in early Asia, fuelling risk aversion across the board while lifting the demand for safe-havens such as gold, yen and so on. The European currency emerged the biggest loser following the results and a fresh sell-off was triggered dragging EUR/USD to weekly lows at 1.0970.
The major although recovered more than half its slide and climbed higher in a bid to fill in the overnight bearish gap.
The EUR/USD pair was heavily offered as markets weigh the NO vote at Greek referendum as Grexit and an ECB bankruptcy which is likely to be a major drag on the common currency. While the Antipodeans were also sold-off with the Aussie reaching fresh six year lows at 0.7463 levels as Greece risk continue to dampen market sentiment. While the yen gained on increased safe-haven bids and trades around 122.30, bouncing-off a dip to a new six-week low of 121.89 reached in overnight trades.
Among the Asian indices, the Nikkei 225 in Tokyo led the sell-off dropping -2.42% to trade at 20037, while Australian benchmark the ASX 200 extends downslide by -1.28% and trades at 5467. South Korea’s Kospi is losing -1.84% to trade at 2065.76. However, China stocks bucked the trend, with Shanghai Composite 2.16% higher at 3766.37.
Heading into Europe – centered on EUR, GBP
Greek referendum results remain on top of investors’ minds heading into the European session with EU officials and the whole euro zone bracing for tough days ahead.
Later today, an emergency Euro group meeting has been scheduled to discuss aftermath of the Greek referendum. European Central Bank (ECB) policymakers will meet on Monday to discuss the outcome of the Sunday referendum in Greece, a week after putting a cap on emergency funding for Greek banks. Emergency Liquidity Assistance (ELA) for Greek lenders is currently capped at €89 billion.
While Finance Minister Yanis Varoufakis and the Bank of Greece also hold an emergency meeting with Greek major commercial lenders early Monday morning, to sought out solution for Greek banks after the ECB denied a request for ELA increase.
On the data space, Germany will report the state of its May factory orders, with 0.4% decline expected in May, and a 3.7% growth annually. The country reported 1.4% growth in orders in April, month-on-month, while it saw 0.4% growth on an annual basis. While the ECB will announce QE purchases for June.
Later in the NA session, we have ISM non-manufacturing PMI and labour market conditions to be reported which will provide fresh cues on the US dollar.
EUR Technicals
Research Team at TD Securities notes, “With EURUSD spot now trading below the 1.1000/1.1050 breakdown area, the next attractors on the downside are the lows of 29 June (1.0955) and 27 May (1.0819). If we move through the latter, the risks of a melt to the downside would increase significantly.”
“EURJPY may remain a clearer and more direct expression of negative EUR sentiment, however. There, we see near-term support at 133.10 and 131.81 before more meaningful support at 129.10. Progress from there will, by necessity, be driven by developments as they occur.”
(Market News Provided by FXstreet)