Euro Slumps Amid German Election 'Disaster'

The Euro (EUR) is facing headwinds due to 'disastrous' results for Germany's CDU government in two local elections over the weekend, raising questions about Chancellor Friedrich Merz's future.

The UK pound (GBP), on the other hand, remained subdued at the end of last week despite an unexpected recovery in August retail sales figures. Sterling continued to face pressure following Thursday's interest rate decision from the Bank of England (BoE).

The US dollar (USD) outperformed its peers due to a sharp decline in the Japanese yen (JPY) and a cautious market mood after US President Donald Trump suggested that the US could potentially resume strikes against Iran.