Euro slips

SINGAPORE: The euro hit a two-month low against the yen on Monday, as German Chancellor Angela Merkel´s efforts to form a three-way coalition government failed, stoking political uncertainty in the euro zone´s largest economy.
Merkel, whose conservatives were weakened after they won an election in September with a reduced number of seats, said she would inform the German president that she could not form a coalition, after the pro-business Free Democrats (FDP) withdrew from negotiations.
The development leaves Germany with two unprecedented options in the post-World War Two era: Merkel forms a minority government, or the president calls a new election if no government is formed.
The euro slid broadly in early Asian trade after the break down of the German coalition talks, but later pared some of its losses. Merkel´s conservative bloc, which won the largest proportion of votes in the September election, will probably be able to form a minority government, said Steven Dooley, currency strategist for Western Union Business Solutions in Melbourne. "They’ll be able to rule in a minority government.