Greek Vote Becoming Much Ado About Nothing Special for Euro

The Greek vote is turning out to be much ado about nothing for the euro.

While Europe’s currency slid, it only reached a one-week low. Price moves have been “muted,” according to Standard Chartered Plc. Investors expected a bigger decline, said Mizuho Bank Ltd. in Tokyo. The vote won’t have a long-term impact on financial markets, according to SMBC Nikko Securities Inc.

“The market reaction so far has been remarkably muted,” said Callum Henderson, the global head of foreign-exchange research at Standard Chartered in Singapore. “Most people are standing aside and waiting to see how the European authorities will respond.”

Greece on Sunday voted against further austerity demands by its creditors, leaving Europe’s leaders to determine if the nation can remain in the euro currency union. German Chancellor Angela Merkel and French President Francois Hollande called for an emergency summit on Tuesday.

The euro declined 0.6 percent to $1.1052 per dollar as of 8:15 a.m. in London. It was down as much as 1.3 percent in Asian trading, bringing it to the lowest level since June 29.

Greece won’t turn out to be a big problem, according to Hiroki Shimazu, the senior market economist at SMBC Nikko in Tokyo. It’s not like the bankruptcy of Lehman Brothers Holdings Inc. in 2008, he said.

‘No Impact’

“Longer term, it will have no impact on the financial markets,” Shimazu said.

While talks between Greece and its creditors halted after Prime Minister Alexis Tsipras announced the referendum more than a week ago, Tsipras said following the vote that his country will return to the negotiating table on Monday.

Finance Minister Yanis Varoufakis said he was quitting, saying his presence would hamper aid talks.

“We need to take seriously the contention of leaders that a ‘no’ vote in the referendum doesn’t mean negotiations are dead,” said Daisuke Karakama, chief market economist at Mizuho Bank in Tokyo. “The euro hasn’t fallen as much as we might have thought, so we want to just watch and wait.”

Ray Attrill, global co-head of currency strategy at National Australia Bank Ltd. in Sydney, said there’s uncertainty.

“Until we see what the inclination, particularly for the German side, is when they meet tomorrow, that’s just making people hesitant to jump in with both feet and sell the euro,” he said.