Euro Holds Firm Amid German Political Turmoil
The euro has absorbed a German political shock after state elections saw the far-right Alternative for Germany (AfD) secure first place in northeastern states. This historic outcome deals a direct blow to Chancellor Friedrich Merz's mainstream conservative coalition, injecting fresh political risk premia into continental bourses.
The single currency held steady around $1.1482 as trading desks processed weekend voting projections. The euro found support despite domestic political friction, with energy input costs easing on reports of alternative supply bypass routes in the Persian Gulf.
European Central Bank President Christine Lagarde and Executive Board member Piero Cipollone are scheduled to deliver public remarks later in the day, which traders eagerly await for guidance on future rate paths. The central bank's rate hike two weeks ago is still being digested by European bond markets.