The euro slid to a nine-year low against the dollar on Monday. It fell by 1.2 percent to 1.1864 dollars – its weakest level since March 2006.
A two pronged force has led to the fall – last week’s comments from ECB President Mario Draghi that the bank could soon start quantitative easing and Greek political turmoil.
“We are seeing discussions about Greece as a leading subject for the media and for investors. But it is the fact that necessary reforms in France and Italy are not being pushed forward which leads to uncertainty for many investors. And that’s the reason why more money is flowing to the US, out of the eurozone,” said Christian Kahler analyst at DZ Bank, Frankfurt.
In 2011, 1.29 dollars marked the lowest level to which the euro fell. 2012 and 2014 marked new lows with the currency shedding nearly 12 percent against the dollar last year. Analysts fear the downward pressure on the euro will persist in the months ahead.
Athens could take centre stage in the euro drama as its voters head to the polls in three weeks time.
When a country has been bailed out to the tune of 240 billion euros its internal politics become the eurozone’s too.
Quantitative easing may stimulate the economy but the Athens ballot could have consequences across other borders.
“Greece is really relevant to the eurozone for a Greek exit would stoke fears that there would still be other candidates. This in turn would lead to a bank run and banks customers would withdraw their funds,” commented Fidel Helmer Berater of Bei Hauck and Aufhauser private bank.
Political uncertainty rattled the Greek markets on Monday. In Athens the ATG index fell 5.6 percent with lenders National Bank, Bank of Piraeus and Alpha Bank down 5.2 to 7.4 percent.
One analyst said a lot of people were getting out of Greek assets thinking it would be too late after the elections adding Greek stocks could slide further.
Get a different perspective
Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.