020 7898 0500It really is quite surprising how the markets can react to news. Reports that Angela Merkel’s CDU/CSU party had reached a deal with the SPD should – in theory – have bolstered the euro’s position against a basket of currencies.
However, there was a caveat in that the SPD could gain control of the finance ministry and, if true, this could have a significant bearing on future economic policy. The euro has consistently strengthened with the current monetary policy and it is perhaps the case that investors fears a change is NOT as good as a rest in this instance.
Today we have the German balance of trade which could (again, in theory) boost the euro if it comes in better than expected.
