Euro weaker on pre-election news, yen down on outflows, trade

Story link: Euro weaker on pre-election news, yen down on outflows, trade

The euro was mixed but mostly weaker on Thursday. Part of its weakness had to do with the results of a poll out of Germany implying that the center-right Christian Democrats and their allies are losing popularity to the Social Democrats ahead of parliamentary elections slated for September 18. The worry is that if the Christian Democrats cannot form a majority government and instead are forced into a coalition, economic reform might slow down.

The euro lost 0.3 percent to £0.6744 in relation to sterling, its lowest level since June. The shared currency also lost 0.1 percent to $1.2399 against the US dollar, but was up 0.2 percent to ¥136.95 in relation to the yen.

The Japanese currency was hut by net outflows in the week ending September 2 that were much larger than inflows, to the tune of ¥828 billion leaving the country versus ¥250 billion going in. Also affecting the yen was slow trade that resulted in a trade deficit of ¥37.8 billion for the first 20 days of August, especially in light of a trade surplus of ¥98.2 billion during the same period last year.

The yen dropped 0.5 percent to ¥203.06 against sterling and was down 0.8 percent to ¥85.14 in relation to the Australian dollar.

The Aussie benefited from strong figures from the labor market, and gained 0.7 percent to $0.7709 against the US dollar.

Elsewhere, sterling gained 0.1 percent to $1.8387 versus the US dollar, while the Canadian dollar added 0.5 percent to C$1.1823 in relation to the US dollar.