Asian Markets Mostly Weaker, Euro Struggles With German Politics
- Most Asian bourses were lower Monday
- News of a walkout in Germany's coalition building marathon hit the single currency
- The US Dollar held up, albeit above one-month lows
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Asian markets were mostly lower Monday with investors still looking nervously at US tax reform plans and also at Germany where a coalition government remains elusive.
The Nikkei 225 fell 0.2 %, with most other bourses down by a similar amount. The Kospi was edging up into flat territory by the close however, with Hong Kong’s Hang Seng also nosing higher.
The Euro was hit by the apparent failure of German government-forming talks Sunday. The Free Democratic Party apparently walked out of discussion which seem unable to push past differences of view on immigration and energy policy. There is no sense of panic yet but Germany voted on September 24 and time to form an administration is getting short.
The US Dollar held above last week’s lows against a basket of its major traded rivals, but those lows marked a one-month nadir. The Australian Dollar held up and even gained a little despite an International Monetary Fund report on its homeland suggesting that interest rates could stay at record lows for another year.
Gold prices slipped a little as the US Dollar held firm while crude oil prices rose. The approach of OPEC’s month-end meeting will probably dominate near term trade. The body is set to decide on the extension of output cuts. The rest of the session is light on economic data. The probable highlight will be European Central Bank President Mario Draghi who will speak in Frankfurt.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.