Euro pressured as Merkel’s CDU loses ground

 

German regional election results hit the Euro

It was a soft start to the week for the Euro after weekend regional elections saw Chancellor Merkel’s CDU party’s support in the Hesse region decline to 28%, 10% lower than in 2013 and the party’s worst result since 1966, German press reported. Support for coalition partner SPD also fell. The Euro was marked lower versus the US dollar at today’s open and, though feeling some pressure, failed to take out last week’s low. It’s now trading at 1.13929.

 

EUR/USD Daily Chart

Source: OANDA fxTrade

 

To add further pressure, the US dollar rebounded slightly after Friday’s sell-off, though there was no news or data to drive the correction. The currency scorecard for the Asian session shows the kiwi outperforming against the US dollar while the Swiss franc under-performed, according to Bloomberg calculations.

 

Aussie dips as PM’s approval rating falls

According to the latest Newspoll survey, PM Morrison’s approval rating turned net negative for the first time since taking office, Australia’s financial press reports. This took some of the wind out of the sails of AUD/USD which had eked out small gains in the previous two sessions. The FX pair has regained last ground and is now marginally in the black at 0.7094, though still above the near-31 month low of 0.7020 struck on Friday. The 200-hour moving average sits at 0.7095.

 

AUD/USD Hourly Chart

Source: OANDA fxTrade

 

UK budget in the spotlight

The main event on the European data calendar will be the presentation of the UK autumn budget to parliament during the afternoon. In comments to the BBC, Chancellor Hammond said he has a “money buffer” in case of a Brexit “shock”. Prior to the budget, the UK releases lending and money supply data for September, while the European Commission is scheduled to release its latest economic growth forecasts.

NOTE: Europe pushed the clocks back by one hour at the weekend

The US session sees the Fed’s favored monitor of inflation, the personal consumption expenditure prices index, released for September. It rose 0.1% m/m in August and any acceleration in gains would confirm the Fed’s hawkish rate trajectory. Note that the Q3 data released Friday already showed a slower-than-expected increase for the price index on a quarterly basis. Personal income and expenditure accompany that release.

You can view the full MarketPulse data calendar at: https://www.marketpulse.com/economic-events/

 

Source: MarketPulse

 

 

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.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.