The German elections yielded a fractured parliament and that sent the euro down. The team at BTMU analyzes:
Here is their view, courtesy of eFXnews:
BTMU FX Strategy Research notes that the EUR has weakened during the last trading sessions following the more unfavorable result of German elections.
“As widely expected Angela Merkel won her fourth term as German Chancellor despite a sharp decline in public support. Her bloc of the CDU and CSU won only a combined 33% of the vote compared to 41.6% in the previous election. However, the main opposition party of the SPD also performed poorly securing just 20.5% of the vote which was a record low since the creation of the federal republic. The main beneficiaries from the loss of support for the main parties were the far-right AfD who won 12.6% of the vote and the liberal FDP who won 10.7% of the vote thereby securing them both seats in the new parliament,” BTMU notes.
“Overall, we would still expect the immediate euro negative reaction to remain limited although it does highlight potential downside risks ahead,” BTMU argues.
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