Euro Remains Weaker After German Election Results
September 25 2017 - 12:17AM
RTTF2
The euro remained lower against its key counterparts in early
European deals on Monday, as support for German Chancellor Angela
Merkel's alliance declined in the federal election on Sunday and
she will have to build up a coalition to form a government in the
wake of growing votes for the Alternative for Germany.
The lead for Merkel's centre-right CDU collapsed eight points to
around 33 per cent, as the AfD is set to become the third largest
party in the Parliament.
Merkel's current coalition partner, the social democratic SPD,
ruled out of forming a coalition and said that they will become an
opposition party.
Merkel's conservative bloc must look to form a government with
the Free Democrats, the Greens and other smaller parties to remain
in power.
Survey results from Ifo Institute showed that Germany's business
confidence weakened in September.
The business confidence index fell to 115.2 in September.
Economists had forecast the indicator to remain at August's
initially estimated value of 115.9.
The current situation index came in at 123.6 in September, below
the expected reading of 124.6
The euro fell back to 1.1899 against the greenback, just few
pips short of its early Asian session's 4-day low of 1.1897. The
next possible support for the euro-greenback pair is seen around
the 1.18 region.
The single currency retreated to 133.52 versus the Japanese yen,
heading to pierce a 4-day low of 133.43 set at the beginning of
Asian deals. If the euro-yen pair extends decline, 132.00 is
possibly seen as its next support level.
Data from the Cabinet Office showed that Japan's leading index
decreased less than initially estimated in July.
The leading index, which measures the future economic activity,
dropped to 105.2 in July from 105.7 in June. The reading for July
was revised up from 105.0.
The euro pulled back to 1.1565 against the Swiss franc, from a
high of 1.1591 hit at 8:15 pm ET. This may be compared to a 4-day
low of 1.1548 hit at the commencement of Asian deals. Continuation
of the euro's downtrend may see it challenging support around the
1.14 mark.
The 19-nation currency dropped to 0.8787 against the pound and
held steady thereafter. The pair finished last week's trading at
0.8852.
Extending early decline, the euro slid to a 4-day low of 1.4952
against the aussie. The euro is poised to locate 1.48 as the next
support level.
The euro pared gains to 1.4679 against the loonie, off its early
high of 1.4730. Further weakness may take the euro to a support
around the 1.45 region.
Looking ahead, at 8:30 am ET, Federal Reserve Bank of New York
President William Dudley speaks on "Workforce Development" at
Onondaga Community College.
Half an hour later, the ECB President Mario Draghi gives
testimony before the European Parliament Economic and Monetary
Affairs Committee in Brussels, Belgium.
Federal Reserve Bank of Chicago President Charles Evans speaks
before the Economic Club of Grand Rapids in Michigan at 12:40 pm
ET.
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