More on the Euro Slide

AFP News20 November 2017

On currency markets the euro fell after Merkel’s attempts to form a new government for Europe’s biggest economy collapsed — plunging Germany into a crisis that could see it hold fresh elections.

The leader of the pro-business FDP, Christian Lindner, walked out of talks, saying there was no “basis of trust” to forge a government with Merkel’s conservative alliance CDU-CSU and ecologist Greens.

There are fears the country could be gripped by months of paralysis with a lame-duck government, while Merkel’s political future has also been called into question.

“The news is negative for the euro, but its longer-term implications are not clear yet,” Mansoor Mohi-uddin, head of currency strategy in Singapore at NatWest Markets, told Bloomberg News.

However, while the euro has taken a hit, Stephen Innes, head of Asia-Pacific trading at OANDA, said he doubted the sell-off would be sustained.

“Liquidity is exceptionally thin and could exaggerate moves. But this knee-jerk reaction does look a bit overdone as Merkel can still establish a minority government with either the FDP or Green Party,” he said.

Oil prices were mixed but both main contracts managed to hold on to Friday’s surge that came after crude giant Saudi Arabia’s energy minister Khaled al-Faleh said he remained committed to an OPEC deal to limit production.

Yahoo Via the AFP

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

Latest posts by Stephen Innes (see all)