Forex Flash: USD stronger on Greece – Wells Fargo

[John Starks]

Growing concerns towards the Eurozone and Greece political developments are weighing on risk sentiment, triggering the strengthening of the greenback. The leading political party in Greece post-elections failed to form a government, and the second placed party is unwilling to compromise. Repeated failure should push for new elections, perhaps by mid June, according to Wells Fargo analysts.

“The interim period of uncertainty has the potential to weigh on the euro, and more broadly on foreign currencies and global equity markets”, wrote head of currency strategy Nick Bennenbroek.

The Eurozone debt and political crisis should continue the main issue in the comind days. “That said, given subdued overall global data and discouraging European developments, our bias if for U.S. dollar and yen strength, and further weakness in other foreign currencies in the near-term”, Bennebroek added.