The euro was at the receiving end of a major battering on Monday session, sliding to its worst finish in two months, as the intensifying political crisis in Germany rattled investors.
Due to a higher level of volatility, the euro edged 0.56% lower to settle at 1.1732 per US dollar, its lowest settlement since September. It even dropped to a record low of 1.1723 per greenback but was able to pare some losses before the close.
Against the Japanese yen, it gave up 0.1% at 132.13 while the British pound gained ground as it crept up from 1.1206 to 1.1245.
It was a bleak start for the single currency as the Europe’s biggest economy, the Germany, is facing untimely political turmoil.
According to reports, current German Chancellor Angela Merkel has failed to form a Jamaica coalition between three parties including the Free Democrats, the Greens, and her Christian Democratic Union.
With the result, Merkel puts her position in jeopardy as she might face a leadership challenge in the future, which could end her 12-year service as Germany’s top leader.
The recent political turmoil in the country is not only a good sign for the euro but also in the overall economy in general as prolonged uncertainties could hurt major plans and works concerning the future of Germany.
Merkel was the architect of Germany’s remarkable recovery in the financial crisis of 2008, which resulted to a stable economy in the country during her term.