Investing.com – The euro was broadly lower against the other major currencies on Monday after talks aimed at forming Germany’s next coalition government collapsed overnight, raising fears over political uncertainty in the euro zone’s largest economy.
EUR/USD was at 1.1755 by 03:01 AM ET (08:01 AM GMT), off 0.28% for the day after touching an overnight low of 1.1723.
Negotiations broke down after the pro-business Free Democratic Party (FDP) walked out of the talks, ending efforts to form a three-way coalition government.
The collapse of talks leaves German Chancellor Angela Merkel with the option of forming a minority government. If no new government is formed the president can call a new election.
Against the yen, the euro was last down 0.39% on the day at 131.67 after hitting a two-month trough of 131.29 overnight.
The euro was also lower against the pound, with EUR/GBP sliding 0.43% to 0.8880.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.15% to 93.75, boosted by the weaker euro.
But the dollar’s gains were held in check by lingering doubts over whether Republicans can pass a historic tax overhaul.
President Donald Trump tweeted on Sunday that Senator Jeff Flake will oppose the Republican tax bill, but the senator’s office said he has not yet made up his mind.
Senate lawmakers are expected to vote on their version of the bill after this week’s Thanksgiving holiday.
The dollar was little changed near one-month lows against the yen, with USD/JPY at 112.04.