ING analyst Francesco Pesole said losses by the CDU in German state elections are likely to have only a limited impact on the euro. He said the results mainly reflect local dynamics rather than a verdict on Merz’s reform agenda. Still, falling CDU support and increasing political fragmentation could make advancing reforms harder, which clouds the euro outlook but is unlikely to supplant interest-rate differentials and oil prices as the currency’s primary drivers.

2026-09-21

ING analyst Francesco Pesole said losses by the CDU in German state elections are likely to have only a limited impact on the euro. He said the results mainly reflect local dynamics rather than a verdict on Merz’s reform agenda. Still, falling CDU support and increasing political fragmentation could make advancing reforms harder, which clouds the euro outlook but is unlikely to supplant interest-rate differentials and oil prices as the currency’s primary drivers.