Although they won the most votes, Merkel’s centre-right Christian Democratic Union will have to stitch together an uneasy coalition to form a government. Investors reacted by selling the Euro on apprehensions that Merkel could run into difficulties forging a coalition.
The result marked a partial affirmation of Merkel’s emphasis on Germany’s economic stability and prosperity at a time of political upheaval elsewhere around the globe. However, the groundswell of support for AfD upended any notion that Europe’s most important geopolitical player is immune to the populist sentiment roiling other western democracies. It also revealed the extent of resentment toward Merkel’s 2015 decision to open the country’s borders to more than a million asylum seekers amidst the European refugee crisis. The EURGBP pair is sliding early Monday to last trade around the 0.8790-zone.