Before the start of the trading day it was announced that Angela Merkel did not manage to form a parliamentary majority. This news certainly has had a negative impact on the euro, as this entails either the formation of a minority government or early re-elections that will add a destabilizing factor in the Eurozone. We cannot discard the possibility that Angela Merkel has already been Chancellor for 12 years, so she might lose in the event of a re-election. After the previous elections, when the defeated ruling party and Angela Merkel remained at their post, investors reacted positively to the news and have supported the single currency.
Today there will be a series of interventions by the ECB, including by the head of the ECB, Mario Draghi, who will discuss the further monetary policy and may talk about the target level of inflation and the steps taken to improve it.
The United States on Thursday will be celebrating Thanksgiving Day and New York Stock Exchange will be closed. This week there will be little on the US economic indicators. On Friday, after the holiday, the Senate will begin consideration of the tax reform. We would soon know the opinion of senators, as some are skeptical about the adoption of this bill, which causes a lot of debate. This event may have a negative impact on the reserve currency.
