The euro strengthened after the centre-right Christian Democrats (CDU/CSU) came first in Sunday’s election while the Germany’s stock futures also rose on the back of the results.
The single currency gained 0.3 per cent in early trading in Europe to $1.0489. The currency briefly hit a high for the year during morning trading in Asia, rising as much as 0.7 per cent to $1.0528.
“Obviously some relief is showing through in the euro now,” said Tony Sycamore, a market analyst at IG Australia.
Analysts at ING also noted the boost to the euro “from the CDU/CSU being able to form a coalition only with the SPD, without any smaller third party”.
“There’s a lot on the table for markets this week, and we expect plenty of noise in FX,” they added.
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