A recently conducted poll in Greece is giving rise to new found hope that the country may as yet pull off a miracle and agree on the austerity measures which will allow them to stay in the Eurozone. That poll outcome is helping to give a small lift to the Euro against the U.S. Dollar, which earlier bounced off of a 2-year low. As reported at 11:57 a.m. (JST) in Tokyo the Euro was trading at $1.2575, a gain of 0.5% and off of Friday’s trough of $1.2495, a level not seen in almost two years.
If the poll results are actualized that would suggest that conservatives could eke out an election win. That would raise the probability that Greece will be able to form a coalition government which ultimately would work within the existing parameters of the E.U./IMF bailout terms. Regardless of that outcome, however, the Euro remains under pressure as ongoing worries of a lack of growth continue to weigh, as does the fragile situation in the Spanish banking sector. Most analysts expect that the Euro’s rally, driven primarily by short-covering investors, will be relatively small and short-lived, and even getting to $1.26 will be a challenge.