EUR/USD was down 0.2% at $1.2607 ahead of the Greek elections over the weekend.
However, assurances from central banks to provide liquidity in the event of heightening crisis is boosting risk appetite and providing some support to the currency pair.
The Greek elections over the weekend will most likely decide if Greece will continue its stay in the eurozone, and in current polls Alexis Tsipras of the anti-bailout leftist Syriza party is running neck and neck with conservative New Democratic party leader Antonis Samaras.
Tsipras has vowed to refuse the terms of the bailout deal, which could hasten the country’s exit from the euro. Central banks of the G20 economies have promised to coordinate their actions to support risk appetite and stabilise the financial markets if the Greek election result creates panic.
European Central Bank president Mario Draghi said today that the bank was ready to lend its support to the region’s banks in the event of increased tension. Looking at Europe's troubled constituents, the yield on the Spanish 10-year government bond had eased to 6.86% this morning, while the yield on the Italy’s benchmark 10-year bonds also declined to 5.85%.