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27 Nov 2013
Euro strengthens on German coalition accord, four year high on yen
FXstreet.com (London) - The euro strengthened on news that the proposed German coalition has reached an agreement that would see it form a government in a Grand Coalition. The agreement will see wages and spending increases without tax hikes.
The accord reached just before 5 am in Berlin this morning concluded 17 hours of negotiations between Angela Merkel’s Christian Democratic Union party, the leaders of allied Bavarian sister party, the conservative Christian Social Union, and the Social Democrats.
The deal must still be put to a vote before the 470,000 members of the Social Democrats, who will serve as a junior partner in the Grand Coalition.
The euro has also been given a lift by a rise in short-term market rates. Euro-priced bank-to-bank lending rates climbed yesterday as levels of excess liquidity in the financial system fell to its lowest in more than two years.
The euro has climbed 0.2 percent against the dollar to USD1.3596. Further gains may be limited from here, but any currency moves could be exaggerated by low volumes ahead of Thanksgiving in the US tomorrow.
Against the yen, the euro has hit a four-year high, climbing 0.69 percent to a high of JPY138.5432.
The accord reached just before 5 am in Berlin this morning concluded 17 hours of negotiations between Angela Merkel’s Christian Democratic Union party, the leaders of allied Bavarian sister party, the conservative Christian Social Union, and the Social Democrats.
The deal must still be put to a vote before the 470,000 members of the Social Democrats, who will serve as a junior partner in the Grand Coalition.
The euro has also been given a lift by a rise in short-term market rates. Euro-priced bank-to-bank lending rates climbed yesterday as levels of excess liquidity in the financial system fell to its lowest in more than two years.
The euro has climbed 0.2 percent against the dollar to USD1.3596. Further gains may be limited from here, but any currency moves could be exaggerated by low volumes ahead of Thanksgiving in the US tomorrow.
Against the yen, the euro has hit a four-year high, climbing 0.69 percent to a high of JPY138.5432.