With the French Election out of the way, Euro investors take aim at the German Election by which Angela Merkel could hold her fourth term in office. With the anti-establishment movement fading will the Euro find support? The below table shows the difference you could have received when trading between the high and low point of yesterday's trading session.
|Currency Pair||% Change||Difference on £200,000|
Over the weekend, Angela Merkel’s Christian Democratic Party won a state election, unseating their centre-left’s rivals the Social Democrats in the North Rhine-Westphalia region, an area that has been dominated by the party since 1996.
This has raised the important question, will Merkel serve a 4th term as the German Chancellor? This particular region where Merkel has just won an election is home of Martin Schulz, the Social Democrat who will be looking to stop Merkel serving a 4th term on the 24th September, when Germany go to the polls. Although sometime away, this was the last election before the national vote. In my opinion, it seems as though the anti-establishment theme in the Eurozone could by starting to die off.
My reasoning behind this; firstly it was the Dutch election in March, followed by the French election this month and now all eyes turn to Germany. Both results so far have implied that the Eurozone is standing strong after the Brexit, and this political update from Germany should only add to Euro strength further down the line, as Germany the driving force of the Eurozone looks set to keep their pro EU chancellor for another term.
Today, the ZEW survey for Germany will be released and will be scrutinised for further signs that the German economic recovery is still building momentum. Recent economic releases have suggested that the German economy is flying and if the figures today are a strong release, I wouldn’t be surprised to see the Euro strengthen. Tomorrow, important inflation data will be released and investors will be looking to see if last month’s jump was a temporary blip. If this isn’t the case and inflation figures are strong, expect to see further Euro strength. Clients with a short term requirement should watch these events carefully and be in contact with your broker early to understand how this could affect your trade.
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