Investing.com – The dollar fell sharply against a basket of major currencies after the euro strengthened amid easing German geopolitical uncertainty as Germany’s Social Democrats said it would consider talks with Angela Merkel’s Christian Democratic party to form a government.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.39% to 92.68.
“The Social Democratic Party (SPD) is firmly convinced that talks have to take place. The SPD is not closed to talks,” Hubertus Heil, the general secretary, said early on Friday.
The announcement eased days of uncertainty surrounding the future of the Angela Merkel after she announced Monday that she failed to form the country’s next government.
EUR/USD rose to 0.68% to $1.1932, while EUR/GBP rose 0.56% to £0.8952 as data showed confidence among German businesses topped expectations.
GBP/USD rose 0.14% to $1.3227, while USD/JPY made strong gains, rising 0.30% to Y111.56 as investor appetite for riskier assets continued, reducing demand for safe-haven yen.
USD/CAD fell 0.02% to C$1.2712 on the back of an uptick in the Canadian dollar amid bullish oil prices.