The Euro has strengthened against the US Dollar following an overwhelming win by Angela Merkel in the German elections held on Sunday, 22 September 2013.
The Euro was trading just 0.3% away from a seven-month high, an improvement of 2.5% this year against the US Dollar (EURUSD) and up 17% against the Japanese Yen (EURJPY). It also showed signs of strength against the Swiss franc as well as Australian and New Zealand currencies in early Tokyo trading.
Merkel’s party, the Christian Democratic Union (CDU) received almost 43% of the vote – a gain of 9 points from Germany’s last election held in 2009 and their best results in 23 years – with 25.7% going to the Social Democrats (SPD) led by Peer Steinbrueck. The FDP stood at just below the 5% needed for them to keep their seats in the German Parliamant – the first time since World War II – and the Greens polled around 8% of the vote.
The new anti-euro party, Alternative for Germany (AfD), won around 4.9% of the vote, just under the 5% threshold needed in order to win seats in the German parliament’s lower house. Merkel and other party leaders have said that they would not deal with the party.
In order to govern Europe’s largest economy, Merkel will need to form a coalition once again. She now has the chance a re-run of her first-term "grand coalition" with the SPD or an alliance with the Green Party. The likeliest of outcome is an alliance with the SPD led by Angela Merkel. The two parties are traditional rivals but governed Germany together following the inconclusive 2005 German elections.
The outcome of the German election was what was expected by analysts and supports a continuation of the policy which has, to date, shown considerable support for the Euro.
Filed under: http://www.theleader.info/article/40753/
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