The EUR/USD pair draws some buyers to close to 1.0480 in the early Asian session on Monday. The Euro inches higher as Germany’s conservatives won its election as predicted. Traders prepare for more results from the German election.
Exit polls indicated that Germany‘s conservative opposition CDU and its partner Christian Social Union (CSU) won the most votes in Sunday’s German federal election. This placed leader Friedrich Merz well-positioned to become the next chancellor, with the far-right Alternative for Germany (AfD) placing second. The question now is when the conservative Christian Democrats might assemble a coalition government to provide much-needed reform to a flagging economy.
According to ZDF exit polls, the conservative CDU/CSU group received 28.5% of the vote, followed by the far-right Alternative for Germany (AfD) at 20% and Scholz’s Social Democratic Party at 16.5%.
The softer US economic indicators pull the Greenback down. Statistics released by S&P Global on Friday indicated that the US business activity fell to a 17-month low in February. The latest flash reading indicated the US S&P Global Composite PMI fell to 50.4 in February from 52.7 in January. In contrast, the Manufacturing PMI increased from 51.2 to 51.6 over the same reported period. The Services PMI dropped from 52.9 in January to 49.7 in February, reflecting a loss of momentum in services.
Meanwhile, worries about the US economy and fresh tariff threats from US President Donald Trump shrouded world markets. This, in turn, could propel the US Dollar (USD) and create a headwind for EUR/USD.
