Euro Drops to 3-month Low against Dollar - 7.5.2012

Risk-sensitive currencies fell under pressure in Asian trading hours today after Greece’s and France’s voters raised doubts in the region’s financial stability yesterday. In France Francois Hollande, who promised to soften austerity measures, won presidency, while in Greece the ruling coalition may loose majority in the parliament, according to preliminary results, also increasing uncertainty about the nation’s future.

The single currency slid early in the morning to the lowest level since January 25, touching 1.2954 versus the greenback. However by the beginning of the European trading session the pair rose back above 1.3000 before the data from Germany that may show factory orders in Europe’s biggest economy increased in March by 0.5%. The euro also touched an 11-week low versus the yen – 103.23, and fell to the lowest since November 2008 against the British pound – 0.8033.