The Greek government failed to secure the majority needed to elect the president and consequently the PM called a snap election that the anti-bailout Syriza party may win, if recent opinion polls are to be believed. European stocks made broad losses in this environment; however, the euro was resilient, as the risk of spill over effects from Greece was contained by the prospect of ECB QE.EUR/USD fell to a 29-month low of 1.2132 in the middle of the Asian session. However, the dollar index's retreat helped the pair rebound sharply to hit today's high of 1.2187. Looking ahead, the single currency will remain more sensitive to opinion polls ahead of the Greek election to be held on January 25. USD/JPY came off yesterday's high of 120.71, weighed down by a drop in Japanese stocks in the last trading day of this year. The pair saw a sharp decline in the European session as a retreat in risk appetite boosted demand for safe-havens. Financial markets in Japan will remain closed until January 05.Cable was mostly unfazed by a lower-than-expected growth in UK house prices, staying near 1.5538. But the pair will likely come under pressure in the New Year as it is almost certain that the Fed will lift the interest rate before the BOE.The dollar continued to remain stronger, hitting a level that was not seen in five years. In this environment, USD/CHF hit a fresh 2-week high of 0.9919 on Tuesday. EUR/CHF on the other hand managed to stay near 1.2028. A series of aggressive measures announced by the government provided a relief to the rouble, with USD/RUB falling below the 50 level last week. But concerns over the Russian economy together with falling oil prices triggered a fresh sell-off in the rouble this week. USD/RUB is currently staying near yesterday's high of 60.92.AUD/USD rebounded from 0.8122, which the pair touched in early Asia trading. China's HSBC manufacturing PMI to be released on Wednesday would prove to be negative for the Aussie, as the country's manufacturing sector is expected to remain subdued for some time. Elsewhere, NZD/USD extended its recent gains, settling near 0.7820. Although the Kiwi's gains will likely be limited against the dollar, it will continue to increase against the Aussie, especially as the RBA is expected to deliver a rate cut in the first half of 2015.
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