El partido de Merkel perdio en las elecciones, se teme menos apoyo para los paises problema en Europa, el euro baja, el Franco sube
Euro Weakens on Merkel’s Election Defeat, Stock Losses; Franc Strengthens
By Lucy Meakin
September 05, 2011 08:08 EDT
The euro fell for a fifth day versus the dollar after an election loss for Germany’s ruling party stoked concern support is fading for bailouts of Europe’s most- indebted nations, boosting demand for refuge currencies.
The Swiss franc strengthened against all its major counterparts as European shares tumbled and the cost of insuring government bonds in the region from default climbed to record highs. The yen gained as economists said a U.S. report tomorrow will show services industries slowed, adding to signs global growth is weakening. The Dollar Index climbed to a one-month high after German Chancellor Angela Merkel’s Christian Democratic Union was defeated in the election in her home state.
“Another state that Merkel’s CDU has failed to secure in the vote, that’s six now in total, has spurred some euro selling,” said Lauren Rosborough, a senior strategist at Westpac Banking Corp. on London. “We’ve got risk aversion across the board with dollar buying, Swiss buying, gold a little bit stronger and the euro has been sold off.”
The euro slid 0.6 percent to $1.4124 as of 1:02 p.m. in London after falling to $1.4108, the weakest level since Aug. 11. The single currency dropped 0.5 percent to 108.54 yen, and lost 0.8 percent to 1.11087 francs. The yen was little changed at 76.87 per dollar.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, climbed 0.4 percent to 75.051, after rising to 75.101, the highest level since Aug. 5.
The Stoxx Europe 600 Index of shares slumped for a second day, losing 2.8 percent, and gold for immediate delivery rose as much as 1.1 percent to $1,903 an ounce.
Merkel’s Loss
The Social Democrats, Germany’s main opposition party, won yesterday’s election Mecklenburg-Western Pomerania with 36.1 percent of the vote, while Merkel’s party had 23.3 percent, ZDF television projections showed.
The result in the eastern state where Merkel’s election district is located means her national coalition has been defeated or lost votes in all six German state elections this year as voters resist her bid to prevent a euro-region breakup by putting more taxpayer money on the line for bailouts.
“Positioning has turned against the euro again and news flow isn’t helping,” Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in London, wrote in an e- mailed note. Merkel’s defeat “simply adds to the sense that saving the euro is going to be made more difficult by opposition from within Germany.”
Bunds Gain
German 10-year bund yields dropped to a record 1.89 percent, while the yield on similar maturity Greek securities surged to a euro-era high of 18.88 percent. Credit-default swaps on Greece soared 100 basis points to 2,450, according to CMA. Contracts on Italy jumped 24.5 basis points to a record 427, and France was up 13.5 at an all-time high of 185.
European services and manufacturing growth weakened in August as austerity measures and waning demand clouded growth prospects. A composite index based on a survey of euro-area purchasing managers in both industries dropped to 50.7 from 51.1 in July, Markit Economics said today. A figure above 50 indicates growth.
The European Central Bank will cut interest rates by 33 basis points over the next 12 months, according to a Credit Suisse Group AG index based on swaps. Policy makers will leave the benchmark at 1.5 percent at their next meeting on Sept. 8, according to all the 57 economists surveyed by Bloomberg.
‘Moving Down’
“If the ECB takes away the tightening bias, it’s going to take away some support out of the euro,” said Alex Sinton, a senior dealer at ANZ National Bank Ltd. in Auckland, New Zealand. “You would see the euro moving down to the $1.4010 area.”
The yen appreciated versus 13 of its 16 major peers as signs the U.S. economy is slowing spurred demand for safer assets. The Institute for Supply Management’s non-manufacturing index fell to 51 last month, the lowest since January 2010, according to a Bloomberg News survey.
U.S. payrolls were unchanged in August, the weakest reading since September 2010, the Labor Department said Sept. 2. President Barack Obama is scheduled to outline his plans to spur the economy in a Sept. 8 address to Congress. U.S. financial markets are shut today for a holiday.
“The market went into payrolls hopelessly optimistic and that optimism wasn’t rewarded,” said Robert Rennie, chief currency strategist in Sydney at Westpac Banking Corp., Australia’s second-largest lender. “Developments in Europe justify further risk aversion.”
The Swiss franc, a traditional haven from market turmoil, surged 1.6 percent versus the Mexican peso, 1.5 percent against New Zealand’s dollar and 1.1 percent versus Sweden’s krona.
To contact the reporter on this story: Lucy Meakin in London at
lmeakin1@bloomberg.net.