Euro slides as Angela Merkel announces imminent step down

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Euro slides as Angela Merkel announces imminent step down

The Euro suffered a jolt against the American dollar on Monday after the German Chancellor Angela Merkel surprised everyone by announcing her decision to not run for re-election for the position of the party leader of the Christian Democratic Union (CDU).

The Euro lost around 0.4% of its value before closing the day at 1.14 against the dollar. Analysts stated that the Euro could be under strain because of the import of Merkel's decision. Reuters quoted Commerzbank's foreign exchange analyst Ulrich Leuchtmann on the subject.

Leuchtmann stated, "The euro has come under some pressure because she (Merkel) is seen as a pro-European force despite being a tough negotiator when it comes to bail-outs." Merkel also added that she wouldn't be re-running for the country's Chancellor's post once her current term ends in 2021.

Merkel has been the leader of the CDU since 2000 and was elected as the country's chancellor in 2005. She is currently in her fourth term as the incumbent. Analysts also stated that the dollar could see a surge against the Euro and other currencies, given the problematic climate brewing all around.

According to Goldman Sachs' forex's joint-head Zach Pandl, who was quoted by Reuters, "This (the upward surge of the dollar) likely reflects a number of factors, including long dollar positioning and, by the end of this week, some modest repricing of Federal Reserve expectations."

Moving along to other commodities, the global crude dropped on Monday as well. Brent crude was trading at around $77.56, a drop of about six cents, on Monday. The American crude was trading at about $67.59. Although there the date of the enforcement of American sanctions on Iran has drawn near (4th of November), experts have stated that it would be hard for the United States to see to it that all the nations don't import their oil requirements from Iran.

As it so happens, India has already decided to purchase crude from Iran in November.