GulfBase Live Support
The euro slipped on Monday after German Chancellor Angela Merkel won a fourth term but faced a fractured parliament as support for the far-right surged, while Asian shares pulled back, weighed by concerns about China’s economy.
The New Zealand dollar also took a hit as the ruling National Party won the largest number votes in a weekend election but failed to secure a ruling majority, with a protracted period of coalition building now a possibility.
Spreadbetters expected European stocks to start slightly lower, forecasting Britain’s FTSE to open down 0.1 per cent, Germany’s DAX to open little changed and France’s CAC to start 0.2 per cent lower.
The euro slid 0.2 per cent to $1.1933, putting more distance between a 2-1/2-year high of $1.2092 reached on September 8, when a European Central Bank policy meeting left currency bulls optimistic the ECB would begin tapering its big stimulus programme.
MSCI’s broadest index of Asia-Pacific shares outside Japan handed back earlier modest gains and was last down 0.6 per cent.
Two years after Merkel left German borders open to more than 1 million migrants, the anti-immigration Alternative for Germany (AfD) stunned the establishment by becoming the first far-right party to enter parliament in more than half a century.
Merkel now turns to the task of sounding out new partners to build a coalition government after her current Social Democrat (SPD) coalition partner said it would go into opposition. “The market reacted by selling the euro on the possibility of Merkel running into difficulties in forging a coalition.
The euro, however, was already losing support from the European Central Bank’s monetary policy theme and appeared to be on its way lower,” said Daisuke Karakama, Chief Market Economist at Mizuho Bank in Tokyo.
“The election outcome in Germany showed the country was no longer a special presence in Europe amid growing support for populism and the far right.”
In New Zealand, the kiwi, the world 11th most-traded currency, was down 1 per cent at $0.7264 and headed for its biggest intra-day percentage loss since May. It was at a 1-1/2-month high of $0.7435 as recently as September 20, when speculation for a comfortable ruling party win had boosted the currency.
“While there are a few different scenarios and some potentially testy issues to negotiate, ultimately the political landscape appears as though it will remain relatively centralist and we are reasonably agnostic on what it all means,” wrote economists at ANZ.
Chinese stocks remained shaky after falling towards the end of last week following the Federal Reserve’s hawkish policy stance and S&P’s downgrade of China’s sovereign rating. Hong Kong’s Hang Seng was down 1 per cent and Shanghai slipped 0.4 per cent after a number of Chinese cities rolled out new measures to cool housing prices.
Investor sentiment was also undermined by concerns that China’s beefed-up environmental protection could reduce demand, and consequently economic growth.
South Korea’s KOSPI shed 0.4 per cent while Japan’s Nikkei bucked the trend and rose 0.5 per cent thanks to the yen’s weakening against the dollar.
The S&P 500 and Nasdaq closed slightly higher on Friday as worries about the Graham-Cassidy proposal to reform US health insurance eased and investors shrugged off concerns about North Korea.
The pound inched up after sliding on Friday when British Prime Minister Theresa May failed to give any concrete details for how Britain might retain preferential access to Europe’s single market after Brexit.
The currency faced additional pressure on Friday after ratings agency Moody’s downgraded Britain’s credit rating, saying the government’s plans to bring down its heavy debt load had been knocked off course and Brexit would weigh on the economy.
Sterling was up 0.3 per cent at $1.3544 after losing 0.6 per
Oman Daily Observer
The Omani rial’s effective exchange rate index rose by 3.2 per cent to 104.3 points as of the end of September 2018 compared to 101.1 points in the same month in 2017, indicating the currency has enh
Times of Oman
The pound dropped to its weakest level in almost 18 months and government bonds rallied as UK Prime Minister Theresa May was said to have called off a crucial vote in Parliament on her Brexit deal.
Sterling jumped on Tuesday after a senior European Union legal adviser said Britain could unilaterally withdraw its Brexit notice, easing concern among investors about Britain crashing out of the blo
Pound vigilantes may not have enough ammunition to force parliament to pass Prime Minister Theresa May’s Brexit deal even in a second vote, influential investors say. Speculation has been growing tha
The Bank of England on Wednesday warned a no-deal Brexit would trigger a financial crisis in Britain, causing the pound to plunge by 25 percent. The central bank also said in a report that such a sce