According to the latest results, Angela Merkel's Christian Democratic Party won the election in Germany with 32.9% of voters. After Merkel's party, Martin Schulz's Social Democratic Party is ranked with 20.2%. More concerning for Germany is the rise of the "Alternative to Germany" - for the first time in decades, a far-right party is in parliament, and it will be the third power in the Bundestag with 13.5% of the vote.
The results mean that the ruling coalition between Social Democrats and Christian Democrats is losing seats in parliament. In the previous parliamentary elections in 2013, the Christian Democratic Party won 41.5% of the votes, and the Social Democrats - 25.7%.
If these results are confirmed, Merkel has the option of choosing new coalition partners - the liberal FDP, which enters the Bundestag by 10.5%, and the Greens, which earn 9.5% of the vote.
Still, the news is good for the euro, as Merkel's victory was anticipated and the elections went without surprises. It is possible to raise the euro when the markets are opened, but traders will also reflect the situation in North Korea, as well as the Iranian test that was held over the weekend. All these news leading to geopolitical uncertainty is expected to work positively for JPY, Gold and CHF, and for this reason the positive effect on the euro may be limited.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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