Euro recovers slightly after Greek polls; rouble sinks

[NEW YORK] The euro pulled higher against the dollar in late trade Monday after hitting a 12-year low of US$1.1101 in the wake of the leftist Syriza party's victory in Greek elections.

The choice of Syriza leader Alexis Tsipras as prime minister raised the prospect of tough talks with Greece's creditors over easing rescue terms, if not more debt restructuring, and likely more turbulence in the markets.

"Investors can expect Greek-led market volatility for at least six months until a Syriza-led government is better understood," said Tom Elliott, a strategist at investment advisor deVere Group.

"The euro will weaken - perhaps to parity with the dollar - over the next six months as investors seek safe havens," he added.

In late trade the euro pulled back to US$1.1234, and to 133.12 yen. The greenback was also higher against the yen at 118.49.

Meanwhile the ruble sank after a deadly rocket attack on Mariupol, Ukraine, by pro-Russian rebels raised the prospect of more Western sanctions on Moscow and Standard & Poor's cut Russia's debt rating to junk level.

The dollar bought 67.18 rubles in late trade, compared with 64.13 late Friday.

AFP