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Volatility, Chaos, Panic, Despair: Greeks Freak

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Sarkis Zeronian reports: The value of the euro compared to major peer currencies is already dropping as the financial effects of the Greek ‘No’ vote in Sunday’s referendum filter into the global market. With analysts predicting banks facing funding crises and individuals unable to take their money from ATMs, volatility is set to reign for some time.

“It was not the only currency to lose value. The Aussie fell 0.9 per cent to 74.52 U.S. cents, the first time it’s broken 75 cents since 2009, and New Zealand’s dollar slipped 0.6 per cent.”

Bloomberg reports analysts are tipping the investment winners in the situation to be Treasuries and German bunds, benefiting from a “flight to safety”.

“This was also related to regional difficulties involving China where initial public offerings were suspended, as brokerages pledged to buy shares and the state media tried to limit investor panic as officials intensified efforts to stop the steepest plunge in equities the country has seen since 1992.”

With currencies trading throughout the day, the euro began to fall as soon as the outcome of the referendum became clear, even with most traders in Tokyo and Hong Kong yet to reach their desks. The drop is said to herald the start of what is expected to be a volatile week for global financial markets as institutions such as JPMorgan Chase & Co say Greece exiting the eurozone is now the base-case scenario.

The euro lost 1.1 per cent to $1.0992 by 6:12 a.m. Tokyo time, its weakest level since 29 June, also slipping 1.7 per cent against the yen and 1 per cent versus the pound. Greece may only account for less than 2 per cent of eurozone output, but a ‘Grexit’ risks setting a precedent of reversible membership.

It was not the only currency to lose value. The Aussie fell 0.9 per cent to 74.52 U.S. cents, the first time it’s broken 75 cents since 2009, and New Zealand’s dollar slipped 0.6 per cent. This was also related to regional difficulties involving China where initial public offerings were suspended, as brokerages pledged to buy shares and the state media tried to limit investor panic as officials intensified efforts to stop the steepest plunge in equities the country has seen since 1992.

Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, New Zealand, which manages about $7.2 billion, told Bloomberg:

“There’s a whole range of unpredictable outcomes. It’s surprising that the ‘no’ vote won so convincingly, certainly more decisively than the polls had suggested. This puts us in limbo for so much longer and it’s very negative for risk sentiment especially when you add in what we’re seeing with developments out of China.”

Speaking to Bloomberg from Baltimore, Clem Miller, an investment strategist at Wilmington Trust which manages $20 billion, said….(read more)

Breitbart

Follow Sarkis Zeronian on Twitter: or e-mail to: szeronian@breitbart.com

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