Euro to US Dollar (EUR/USD) Exchange Rate Supported By German Coalition News Before Inflation Report
Frankfurt (Nov 12) The Euro may have begun the week trapped in a bearish relationship with peers like the US Dollar and Pound, but the European asset was able to claw back losses during the local session to close trading stronger than it began.
Over the course of Monday the full impact of the devastation in the Philippines pushed investors away from higher-risk, emerging market currencies and towards relative safe-havens like the Euro.
Speculation that the common currency’s recent decline was excessive gave the Euro an additional boost.
In response to the Euro’s movement chief economic strategist Andrew Wilkinson noted; ‘There’s now very finite downside to the euro. The likelihood of a fresh European Central Bank reduction is pretty low and I think that’s probably support for the euro when risk appetite is generally perceived to be on.’
The Euro is currently trading against the US Dollar in the region of 1.3391
The common currency also derived support from reports that German Chancellor Angela Merkel is edging closer to forming a coalition with the Social Democrats, a full seven weeks after she romped to electoral victory.
A highly placed official, SPD General Secretary Andrea Nahles, has intimated that negotiations are over half way complete. Speaking to reporters Nahles stated; ‘We still very clearly have a marathon of meetings in front of us. Things will probably all become very tight.