Euro Under Pressure Following German Elections
The Euro has been under pressure at the market open today due to the German Elections results. Angela Merkel won a fourth term but in order to move ahead needs to form a coalition with other parties.
In addition, the extreme right-wing party AfD has increased its voters and that is spreading concerns across European Union. The EURUSD opened with a market gap at 1.1896 tried to recover but then revived its downside bias.
The British pound is under pressure as Moody’s downgraded Britain credit rating on Friday as the Brexit will worsen economic conditions and that the UK debt remains high. Moreover, Theresa May’s speech about Brexit on Friday failed investors expectations. The sterling dropped to 10-day low against the US dollar on Monday at 1.3430 and that could continue towards next support at 1.3380. The US dollar remains strong due to expectations of Fed rate hike in December remaining strong. Market Participants are looking for later this week news about UK GDP, Current Account data, Net Lending and Mortgage Approvals.