The first shock waves from Greek voters’ rejection of austerity were felt in the currency markets, with the euro down against major peers and Australia’s dollar sliding to a six-year low. Analysts are tipping a flight to safety, with Treasuries and German bunds to benefit.Notice how the U.S. dollar is one of the "safe havens." And not so much for the Chinese yuan.
The euro lost 1 percent to $1.1002 by 6:09 a.m. Sydney time, touching its weakest level since June 29. The currency slipped 1.7 percent against the yen and 0.9 percent versus the pound. The Aussie fell as much as 0.9 percent to 74.52 U.S. cents, the first time it’s broken 75 cents since 2009, as the referendum result dimmed the appeal of higher-yielding assets. The kiwi slipped 0.6 percent, even with China stepping up efforts to arrest a stock-market selloff at the weekend.
With more than half of the ballots counted, Greeks have voted 61 percent against austerity measures required to win another bailout package, according to results posted on the Interior Ministry’s website. The results mean Greece exiting the currency union is now the base-case scenario, JPMorgan Chase & Co. said. China suspended initial public offerings and brokerages pledged to buy shares in weekend measures aimed at halting the steepest plunge in local equities since 1992.
“This is a big surprise, the market definitely expected it was going to be close,” Clem Miller, an investments strategist at Wilmington Trust, which manages $20 billion, said by phone from Baltimore. “We’re going to see a lot of volatility and it wouldn’t surprise me if the euro’s down 2 percent or more. Everything’s going to get hit with the exception of safe-haven bonds.”
Still more.
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