Angela Merkel secured a fourth term as chancellor on Sunday, despite the fact her centre-right bloc recorded its worst result since 1949. Merkel’s election victory was overshadowed by a far-right surge, which garnered 13 percent of the vote, while the centre-right bloc secured 33 percent, down from over 41 percent in 2013.
The result sends shockwaves across the European continent and beyond in a clear rejection of Germany’s open-door policy.
EUR/USD dropped around half a percentage point at the open to 1.1896 and now trades just above 1.1900.
Political uncertainty weighed on the Kiwi, as no single party won a majority in the weekend’s election. NZD/USD fell to 0.7251.
Cable stabilized on Monday after slipping on Friday following Moody’s downgrade of UK’s credit rating to Aa2. GBP/USD traded above 1.35 on Monday.
