The Euro to Pound (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates weakened on Thursday as growing concerns over the political situation in Greece countered positive data releases from Germany and the wider Eurozone.
Greece Vote Fails, only two chances left
Pressure in continuing to mount upon the single currency after Greek members of parliament failed to elect a president in their first round of voting on Wednesday evening. The failed vote means that Prime Minister Antonis Samaras has only two attempts left to get his preferred presidential candidate elected before snap elections that could destabilise the Eurozone will have to be called.
The vote saw just 160 MPs out of 300 back the conservative-led coalition governments preferred candidate Stavros Dimas. To win, Dimas had to be endorsed by 200 MPs in the first round. Together, the conservative New Democracy and socialist Pasok parties control 155 seats.
If Samaras fails to get backing for Dimas in the next two rounds of voting a general election will be held, and if opinion polls are correct, the left wing anti-Euro Syriza party has a good chance of taking power.
The Euro fell and remains under pressure as economic markets grow jittery from the prospect of Syriza taking power. They fear that such an outcome could lead to the twice-bailed Athens reigniting the Eurozone crisis and resurrect the prospect of a Grexit from the Eurozone.
The vote is being seen as so vital that the government took the unprecedented step of allowing jailed members of the far-right Golden Dawn party to take part in the voting.
The second presidential vote will occur on December 23, if that fails then the third and final vote will be held on December 29.
The Euro fell against of its major peers despite data showing that construction output across the Eurozone grew by 1.4% in October. Data out of Germany meanwhile showed that business confidence in the Eurozone’s largest economy improved for a second consecutive month.
The Pound strengthened above the 1.27 level against the Euro as the currency was buoyed by data, which showed that UK retail sales increased more than forecast in November. The report compiled by the London based Office for National Statistics showed that retail sales growth increased by their best level in ten years thanks to the Black Friday sales.
The US Dollar was also stronger against the Euro after it found support from data, which showed that the number of Americans filing for unemployment benefits declined last week to the lowest level in six weeks.
Euro Exchange Rates:
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