Euro Pressured by German Politics
The euro continues to weaken versus US dollar at the beginning of the week. The EUR/USD pair lost another 0.15% and traded at 1.1387 level. Earlier today, the single currency reached low $1.1360. Tomorrow, the Eurozone will publish Preliminary Flash GDP.
The euro fell after a report that German Chancellor Angela Merkel will not seek re-election as party chairwoman, marking the end of a 13-year era in which she has dominated European politics. Merkel has loomed large on the European stage since 2005, helping guide the EU through the Eurozone crisis.
Merkel’s Conservatives (CDU) won regional elections in the Western state of Hesse on Sunday, but with surprisingly small support. The coalition SPD partners performed even worse, leading them to question their cooperation with Merkel’s party. The SPD is now planning to create a new roadmap to measure progress in national government, which will be reviewed next year. According to some sources, Merkel may not run for another term as the head of the CDU party.