Despite intensifying talk about Greece exiting the euro zone, catastrophic scenarios predicting the dismantling of the entre single currency area are currently not haunting the markets like they did when the debt crisis started, David Bloom, global head of Foreign Exchange Strategy at HSBC, told CNBC.
But volatility in foreign exchange markets is likely to stay high with the Japanese currency, the yen , possibly stepping into the limelight, other analysts believe.
"The kind of Armageddon scenario where the euro won't exist has disappeared from the market. People are talking about Greece leaving but I don't think people are any more talking about the disintegration of the euro and that is a big change compared to a year ago," Bloom told " Worldwide Exchange ."
"If the currency is not going to exist, it shouldn't be at $1.27," he said, referring to the euro's exchange rate versus the U.S. dollar.
Bloom believes markets will get to a point where they will be "paralyzed," because investors will have to wait for the outcome of the snap election in Greece.
Greek politicians failed to form a government after the inconclusive elections on May 6, so another election will take place on June 17, with parties opposing the stringent austerity conditions in the bailout agreements with the European Union and the International Monetary Fund enjoying strong support.
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