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Euro Slides, Dollar Rises After Elections in Germany, New Zealand - September 25, 2017

Following elections in Germany and New Zealand, global currencies saw a change in their

value. The value of the Euro dropped, while the American dollar saw a small increase in its value.

The fall of the Euro is not too significant, moving only 0.9% downwards to $1.1847 (Machado &

Vaishampayan, 2017). Likewise, the New Zealand dollar saw a decrease of 1%, to $0.7262

(Machado & Vaishampayan, 2017). The fluctuations in global currencies gave the American dollar

a push, with a 0.3% increase.

The changes in the value of both the Euro and the New Zealand dollar is linked to the shifts

in political power within the sovereign nations. For the Euro, the recent elections in Germany have

pointed to the possibility of Merkel’s support weakening. The conservative party, though it is

currently in power with Chancellor Merkel at its lead, is now being forced to compete with the

newly popular Alternative for Germany, AfD, which is beginning to gain traction.

In New

Zealand, political tensions led to a more uncertain environment when their elections failed to

provide a clear result. Power now has to come from an allegiance between ruling powers, which

could result in a win for either the center-right or center-left movements in the nation (Machado

& Vaishampayan, 2017)

Politics, as one can see, can also determine the market value of currency, beyond the normal

and expected conditions, like inflation, which can make nations seem unappealing for investors.

For the US, these type of changes in other nations can make American assets appear more

appealing to potential investors (Machado & Vaishampayan, 2017). That being said, the US has

An increase of the national debt to 98% could put some serious constraints on the spending power of average

Americans.

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its own political tensions that could jeopardize its current standing; currently, the Japanese Yen is

still ahead of the dollar because of the American tensions with North Korea.

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Euro Slides, Dollar Rises After Elections in Germany, New Zealand - September 25, 2017 Following elections in Germany and New Zealand, global currencies saw a change in their value. The value of the Euro dropped, while the American dollar saw a small increase in its value. The fall of the Euro is not too significant, moving only 0.9% downwards to $1.1847 (Machado & Vaishampayan, 2017). Likewise, the New Zealand dollar saw a decrease of 1%, to $0.7262 (Machado & Vaishampayan, 2017). The fluctuations in global currencies gave the American dollar a push, with a 0.3% increase. The changes in the value of both the Euro and the New Zealand dollar is linked to the shifts in political power within the sovereign nations. For the Euro, the recent elections in Germany have pointed to the possibility of Merkel’s support weakening. The conservative party, though it is currently in power with Chancellor Merkel at its lead, is now being forced to compete with the newly popular Alternative for Germany, AfD, which is beginning to gain traction.1 In New Zealand, political tensions led to a more uncertain environment when their elections failed to provide a clear result. Power now has to come from an allegiance between ruling powers, which could result in a win for either the center-right or center-left movements in the nation (Machado & Vaishampayan, 2017) Politics, as one can see, can also determine the market value of currency, beyond the normal and expected conditions, like inflation, whi ...
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