The euro fell to a historic 11-year low against the dollar on Monday after anti-austerity party Syriza came out victorious in the Greek elections.
The currency briefly dipped as low as $1.1088 - its lowest level for over a decade - before briefly recovering to $1.186, a 0.2 per cent drop from last week.
Alexis Tsipras, leader of the victorious Syriza, has promised to roll back anti-austerity measures and renegotiate terms with Greece’s creditors.
On Sunday evening Tsipras proclaimed: “Greece has turned a page. Greece is leaving behind the destructive austerity, fear and authoritarianism. It is leaving behind five years of humiliation and pain.
“Our priority from the very first day will be to deal with the big wounds left by the crisis.”
The news delivers a second blow to the euro in the space of a week, after the European Central Bank revealed last week that it would pump more than €1trn into the eurozone economy. In response, the euro suffered its biggest one-day fall in three years on Friday.
Chris Weston, analyst at IG, commented:
Confusion and uncertainty seems to have crept through traders’ minds in Asia today. The fear of the unknown has seen a number of traders unwinding long positions in European equity indices, with US futures also being sold. This has not been mere speculation, but also traders using futures markets to hedge portfolio risk.Various polls have been predicting a Syriza victory in the Greek election for some time. However, the margin of victory was above expectations and the subsequent coalition with the Independent Greeks may have just complicated matters.