Euro hits 1.11 after Syriza wins Greek elections

The euro fell to fresh new lows at 1.11 against the dollar on Monday after anti-austerity Syriza party won in elections in Greece, 10 points ahead of the conservative New Democracy party.

The single currency fell by 0.10% around 1.1220 against the dollar after recording new lows at 1.1097. The EUR/JPY pair dropped to 130.16, the lowest since 11 years.

According to the final results, Syriza led by Alexis Tsipras got 36.4% of the vote (149 seats out of 300 in the parliament), while the conservative New Democracy party of outgoing Prime Minister Antonis Samaras got 27.8%.

Tsipras will meet with the leader of the right-wing democracy party (opposes to bailouts) on Monday to guarantee he two seats Syriza party need to secure a majority in the parliament (i.e. 151 seats) and form a new coalition government.

Forming a new coalition government that opposes bailout plans will increase the risk of facing government and international lenders, and discussing new conditions for the bailout programs or even reduce Greek debt values, and this in turn puts Greece at risk again of leaving the euro zone.

The negative pressure will increase on the euro and will push it to new lows if Syriza secured the majority to form a new government with the independent right party. The euro is expected to test key support levels at 1.10, and breaking them will send the currency towards 1.00 on the medium term.