The euro intensified its losses this afternoon, as investors voiced their displeasure over the lack of progress in the forming of a German government.
A gloomy speech from German President Frank-Walter Steinmeier, who claimed the country hasn’t seen this kind of political turmoil in decades, seemed to remind the euro of the rather sizeable risk attached to the current situation. German stability is the bedrock of the Eurozone, so any uncertainty emanating from the country is going to seriously weigh on sentiment.
All this took the euro 0.4% lower against the dollar and 0.7% against the pound, taking it to a fresh one week low against the latter. The DAX, on the other hand, was more focused on euro-weakness than Germany’s internal issues, climbing more than half a percent to rise above 13050 – a pretty impressive turnaround from the morning’s losses, which had seen the index threaten to drop below 12850.
Elsewhere the fact the FTSE managed any kind of gains in the face of sterling’s growth – the pound is up 0.3% against the dollar as well as 0.7% against the euro – is noteworthy, even if the index’s 10 point rise still leaves it the wrong side of 7400. As for the US, the Dow Jones rose 80 odd points after the bell, leaving the index not too far away from 23450 despite the uncertainty surrounding the Republican tax plan.
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