Merkel Goes For Third Term, Euro in Range Due to No Surprises | IFCM Hong Kong
IFC Markets Online CFD Broker

Merkel Goes For Third Term, Euro in Range Due to No Surprises - 23.9.2013

Following German elections outcome, the Euro did not move much against the US dollar and still remains in 1.3565/1.3506 tight range since the previous week. The currency pair rose just slightly from 1.3520 to 1.3539. Merkel’s Christian Democratic Union (CDU/CSU) won 42% of the votes, winning the majority as expected. Social Democrats (SPD) are second in popularity with 26% of votes while CDU/CSU partners in the previous government Free Democrats secured just 4.7% down from 14.7% four years ago and did not make it into parliament. Now Merkel would need to form a new coalition, analysts expect that the most probable scenario is that the SPD would agree coalition with the CDU/CSU. Should the latter is achieved would rule out any uncertainty and support the common currency.


Merkel Goes For Third Term, Euro in Range Due to No Surprises


Less importantly but usually with major impact on financial markets, the Chinese Manufacturing PMI for September stood 51.2, higher than estimated and up from previous month. That supports risk appetite and suggests that China is picking up. As a virtue of that, we saw the Aussie bouncing up from support at 0.9382 to 0.9436 as the Australian raw material exports would be benefited by improving Chinese manufacturing, since China is the biggest Aussie trade partner.


At the same time, asset tapering is still on the table and speculation for the next Fed meeting would start soon again. The US dollar index remains in 80.52/80.26 tight range for the time being ahead of Manufacturing PMI data. The US dollar against the Japanese Yen slipped lower to support at 98.91 and we would expect the USDJPY to move as low as 50.0% of 97.76 to 99.65, at 98.63. Lastly, the sterling versus the greenback seem like it finished its corrective move after worse than expected UK Retail Sales pushed the pair to support at 1.5988 and is now hovering again above 1.60.


To close, market participants are focusing today on European Manufacturing PMIs and in the evening on the US PMI indicators, all are estimated to improve.
IFCM Trading Academy - New era in Forex education
Pass Your Course:
  • Get Certificate
trading academy

See Also

image
Follow the Market with Our Live Tools and Calendars
Close support
Call to Skype Call to WhatsApp Call to telegram Call Back Call to messenger