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22 Sep 2013
German election: Implications for EUR/USD
FXstreet.com (Barcelona) - Angela Merkel looks set to get "a super result" to win a third term as German chancellor, according to exit polls, which indicates her conservatives party may take over 42% of the vote, although it seems not to be enough for an absolute majority.
However, while the latest projections still predict Merkel’s conservative CDU capturing the largest share of the vote, the question about whether she will get back to power under the same terms or not still remains.
As things stand, Chancellor Merkel still faces the risk of not being able to form a more preferable coalition with her centre-right ally, a potential outcome which would undermine investor's confidence towards the Euro, if that happens to be the case, as Merkel should have to seek new partnerships with other less than favoured partnerships, such as the centre-left.
Merkel’s CDU and the Bavarian sister party, the CSU, are in a neck-to-neck fight against the three main opposition parties that can also make it into parliament, the SPD, Greens and Left party, with latest projections indicating Merkel's coalition may get 297 seats in the Bundestag lower house versus 301 for the combined opposition.
According to Mike Paterson from Forexlive: "If the SDU-led opposition get into office then the uncertainty will also transfer to the euro capping any notable further gains until the precise manifesto becomes clear." On the flip side, "a good result for Merkel and the euro will see a knee jerk ramp higher which will run into profit taking bringing it back lower to consolidate for next rally."
However, while the latest projections still predict Merkel’s conservative CDU capturing the largest share of the vote, the question about whether she will get back to power under the same terms or not still remains.
As things stand, Chancellor Merkel still faces the risk of not being able to form a more preferable coalition with her centre-right ally, a potential outcome which would undermine investor's confidence towards the Euro, if that happens to be the case, as Merkel should have to seek new partnerships with other less than favoured partnerships, such as the centre-left.
Merkel’s CDU and the Bavarian sister party, the CSU, are in a neck-to-neck fight against the three main opposition parties that can also make it into parliament, the SPD, Greens and Left party, with latest projections indicating Merkel's coalition may get 297 seats in the Bundestag lower house versus 301 for the combined opposition.
According to Mike Paterson from Forexlive: "If the SDU-led opposition get into office then the uncertainty will also transfer to the euro capping any notable further gains until the precise manifesto becomes clear." On the flip side, "a good result for Merkel and the euro will see a knee jerk ramp higher which will run into profit taking bringing it back lower to consolidate for next rally."