The rand was firmer against the dollar on Monday afternoon, despite the latter firming against the euro following German chancellor Angela Merkel's announcement that she would resign as Christian Democratic Union of Germany (CDU) leader.

However, Merkel will stay on as chancellor until 2021, “when she will not seek re-election”.

The rand usually tracks the euro, but the local currency has become so oversold that it showed little reaction to its weakness on Monday.

FXTM analyst Jameel Ahmad said Merkel’s announcement was not the type of news that is expected to have macro-economic implications. “But it could impact the euro and we have seen the trend in the past where the rand can follow the trajectory of the EU currency.”

Earlier, the euro weakened to a two-month low after Merkel’s beleaguered government faced a leadership crisis following an election in the state of Hesse, in which the coalition partners suffered substantial losses.

Still, the CDU won the majority in Hesse — which is home to the country's financial capital Frankfurt — elections. Social Democratic Party of Germany (SPD) leader Andrea Nahles threatened to end the alliance if Merkel did not implement policies to bring back voters, Dow Jones Newswires reported.

The rand was also supported by a turnaround in local bonds, with the R186 benefiting from renewed foreign buying as offshore investors return to the market on the allure of recent higher yields.

At 2.55pm the rand was up 0.7% to the dollar at R14.4723, 0.89% to the euro at R16.466 and 0.76% to the pound at R18.552. The euro was 0.13% lower at $1.1378.

The benchmark R186 government bond was bid at 9.235% from 9.32%.</s>German Chancellor Angela Merkel told her conservative party on Monday that she's ready to step down as party leader following a pair of state election debacles, but plans to stay on as chancellor for the rest of her government's term, German media reported.

Merkel also reportedly said that she won't seek re-election to parliament after its current term ends, indicating that this will be her final term as chancellor — something that had been widely assumed but that Merkel has not until now confirmed.

Merkel, 64, had previously indicated that she planned to seek another two-year term as leader of her conservative Christian Democratic Union at a December party congress, but appeared to be moving quickly to acknowledge pressure for change as her fourth-term government struggles to gain traction.

Merkel has led the CDU since 2000 and has been Germany's chancellor since 2005. There is no single obvious successor, but several potential contenders.

The current parliamentary term is due to expire in 2021, and the dpa news agency reported that Merkel said she won't seek re-election.

She currently governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties — the CDU, Bavaria's conservative Christian Social Union, and the center-left Social Democrats. Her fourth-term government took office only in March but has become notorious for squabbling.

An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground amid gains for both the Green party and the far-right Alternative for Germany party. Merkel's party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens in Hesse.

The debacle followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

Citing unidentified party sources, dpa reported that Merkel told an ongoing CDU leadership meeting Monday that she's prepared to step down as party leader but intends to remain chancellor. The mass-circulation daily Bild also reported that she said she won't run again as party leader.

That's a major concession for Merkel, who for years has insisted that the chancellor should also be party leader. But there is precedent for splitting the two jobs.

Merkel's predecessor, Gerhard Schroeder, stepped down as leader of his center-left Social Democrats in 2004 as his government struggled, but remained chancellor until he narrowly lost an election 18 months later. Helmut Schmidt, West Germany's chancellor from 1974 to 1982, never led the Social Democrats.

"The CDU faces a turning point," Mike Mohring, a regional party leader from eastern Germany, told Welt television. "Angela Merkel knows best what to do, and now she has decided. And that demands respect."

He said that it's important to avoid "long personnel debates" and restore people's confidence in the CDU as a governing party.

Merkel has dragged the CDU to the political center in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011.

She allowed large numbers of asylum-seekers into Germany in 2015, many fleeing the fighting in Syria, declaring that "we will manage it," before gradually pivoting to a more restrictive approach. That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU's Bavaria-only sister party, the CSU, and helped the anti-immigrant Alternative for Germany party gain support.

The Social Democrats' leader, Andrea Nahles, on Sunday demanded a "clear, binding timetable" for implementing government projects before the federal coalition faces an already-agreed upon midterm review next fall.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>German Chancellor Angela Merkel told her conservative party on Monday that she's ready to step down as party leader following a pair of state election debacles, but plans to stay on as chancellor for the rest of her government's term, German media reported.

Merkel also reportedly said that she won't seek re-election to parliament after its current term ends, indicating that this will be her final term as chancellor — something that had been widely assumed but that Merkel has not until now confirmed.

Merkel, 64, had previously indicated that she planned to seek another two-year term as leader of her conservative Christian Democratic Union at a December party congress, but appeared to be moving quickly to acknowledge pressure for change as her fourth-term government struggles to gain traction.

Merkel has led the CDU since 2000 and has been Germany's chancellor since 2005. There is no single obvious successor, but several potential contenders.

The current parliamentary term is due to expire in 2021, and the dpa news agency reported that Merkel said she won't seek re-election.

She currently governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties — the CDU, Bavaria's conservative Christian Social Union, and the center-left Social Democrats. Her fourth-term government took office only in March but has become notorious for squabbling.

An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground amid gains for both the Green party and the far-right Alternative for Germany party. Merkel's party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens in Hesse.

The debacle followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

Citing unidentified party sources, dpa reported that Merkel told an ongoing CDU leadership meeting Monday that she's prepared to step down as party leader but intends to remain chancellor. The mass-circulation daily Bild also reported that she said she won't run again as party leader.

That's a major concession for Merkel, who for years has insisted that the chancellor should also be party leader. But there is precedent for splitting the two jobs.

Merkel's predecessor, Gerhard Schroeder, stepped down as leader of his center-left Social Democrats in 2004 as his government struggled, but remained chancellor until he narrowly lost an election 18 months later. Helmut Schmidt, West Germany's chancellor from 1974 to 1982, never led the Social Democrats.

"The CDU faces a turning point," Mike Mohring, a regional party leader from eastern Germany, told Welt television. "Angela Merkel knows best what to do, and now she has decided. And that demands respect."

He said that it's important to avoid "long personnel debates" and restore people's confidence in the CDU as a governing party.

Merkel has dragged the CDU to the political center in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011.

She allowed large numbers of asylum-seekers into Germany in 2015, many fleeing the fighting in Syria, declaring that "we will manage it," before gradually pivoting to a more restrictive approach. That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU's Bavaria-only sister party, the CSU, and helped the anti-immigrant Alternative for Germany party gain support.

The Social Democrats' leader, Andrea Nahles, on Sunday demanded a "clear, binding timetable" for implementing government projects before the federal coalition faces an already-agreed upon midterm review next fall.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>BERLIN (AP) — The Latest on Germany's local election the central state of Hesse (all times local):

Exit polls show Chancellor Angela Merkel's party leading in a state election in the central German region of Hesse, but a significant drop in support for both her conservatives and their center-left partners in the national government.

The exit polls for ARD and ZDF public television gave Merkel's Christian Democratic Union up to 28 percent support and the center-left Social Democrats 20 percent. When Hesse last elected its state legislature in 2013, they won 38.3 and 30.7 percent, respectively.

There were gains for the Greens, who were roughly level with Social Democrats at up to 20 percent. And the far-right Alternative for Germany was on course to enter the last of Germany's 16 state parliaments with up to 13 percent.

The election has unusually high national political significance following months of infighting in Merkel's federal coalition.

Germany's central region of Hesse is voting in a state election marked by discontent with infighting in the national government — and its results could help determine whether Chancellor Angela Merkel's administration has a long-term future.

Sunday's election for the state legislature in Hesse, which includes Germany's financial center of Frankfurt, comes as support for the country's governing parties is sliding and tensions are high in a federal coalition in office only since March.

Merkel's conservative Christian Democratic Union is defending its 19-year hold on Hesse, previously a stronghold of the center-left Social Democrats, the chancellor's federal coalition partners in Berlin. A disastrous result for either or both parties could further destabilize the national government and ultimately the position of Merkel, Germany's leader for the past 13 years.

Two weeks ago, two of the federal governing parties were battered in a state election in neighboring Bavaria. That has given extra significance to the election in Hessen, which is home to 6.2 million of Germany's 82 million people.</s>German Chancellor Angela Merkel told her conservative party on Monday that she's ready to step down as party leader following a pair of state election debacles, but plans to stay on as chancellor for the rest of her government's term, German media reported.

Merkel also reportedly said that she won't seek re-election to parliament after its current term ends, indicating that this will be her final term as chancellor — something that had been widely assumed but that Merkel has not until now confirmed.

Merkel, 64, had previously indicated that she planned to seek another two-year term as leader of her conservative Christian Democratic Union at a December party congress, but appeared to be moving quickly to acknowledge pressure for change as her fourth-term government struggles to gain traction.

Merkel has led the CDU since 2000 and has been Germany's chancellor since 2005. There is no single obvious successor, but several potential contenders.

The current parliamentary term is due to expire in 2021, and the dpa news agency reported that Merkel said she won't seek re-election.

She currently governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties — the CDU, Bavaria's conservative Christian Social Union, and the center-left Social Democrats. Her fourth-term government took office only in March but has become notorious for squabbling.

An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground amid gains for both the Green party and the far-right Alternative for Germany party. Merkel's party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens in Hesse.

The debacle followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

Citing unidentified party sources, dpa reported that Merkel told an ongoing CDU leadership meeting Monday that she's prepared to step down as party leader but intends to remain chancellor. The mass-circulation daily Bild also reported that she said she won't run again as party leader.

That's a major concession for Merkel, who for years has insisted that the chancellor should also be party leader. But there is precedent for splitting the two jobs.

Merkel's predecessor, Gerhard Schroeder, stepped down as leader of his center-left Social Democrats in 2004 as his government struggled, but remained chancellor until he narrowly lost an election 18 months later. Helmut Schmidt, West Germany's chancellor from 1974 to 1982, never led the Social Democrats.

"The CDU faces a turning point," Mike Mohring, a regional party leader from eastern Germany, told Welt television. "Angela Merkel knows best what to do, and now she has decided. And that demands respect."

He said that it's important to avoid "long personnel debates" and restore people's confidence in the CDU as a governing party.

Merkel has dragged the CDU to the political center in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011.

She allowed large numbers of asylum-seekers into Germany in 2015, many fleeing the fighting in Syria, declaring that "we will manage it," before gradually pivoting to a more restrictive approach. That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU's Bavaria-only sister party, the CSU, and helped the anti-immigrant Alternative for Germany party gain support.

The Social Democrats' leader, Andrea Nahles, on Sunday demanded a "clear, binding timetable" for implementing government projects before the federal coalition faces an already-agreed upon midterm review next fall.

Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.</s>BERLIN (AP) — Germany's governing parties lost significant support in a state election Sunday that was marked by discontent with infighting in Chancellor Angela Merkel's national government and prompted calls for her administration to get its act together quickly.

Projections showed Merkel's conservatives heading for an extremely lackluster win in the vote for the central Hesse region's state legislature. Her center-left governing partners were on course for a dismal result, running neck-and-neck with the Greens for second place.

Merkel's conservative Christian Democratic Union was defending its 19-year hold on Hesse, previously a stronghold of the center-left Social Democrats, the chancellor's federal coalition partners in Berlin.

There was widespread pre-election speculation that a disastrous result for either or both parties could further destabilize the national government, prompting calls for the Social Democrats to walk out and possibly endangering Merkel's own position.

Andrea Nahles, the Social Democrats' leader, said that "the state of the government is unacceptable."

She said her party would insist on Merkel's governing coalition agreeing on "a clear, binding timetable" for implementing projects, and that how that is implemented ahead of an already-agreed midterm review next fall will show "whether we are still in the right place in this government."

Hesse's conservative governor, Volker Bouffier, told supporters that "the message this evening to the parties in the government in Berlin is clear: people want less argument, more objectivity, more solutions." Merkel's chief of staff, Helge Braun, said that the national government must now pull together and "show we are solving the problems that really move people."

Projections for ARD and ZDF public television, based on exit polls and partial counting, gave the CDU 27-28 percent support and the center-left Social Democrats about 20 percent. When Hesse last elected its state legislature in 2013 — on the same day that Merkel was triumphantly elected to a third term as chancellor — they won 38.3 and 30.7 percent, respectively. That would be the worst result in the region for the Social Democrats since World War II.

There were gains for the Greens, who were roughly level with Social Democrats at nearly 20 percent — compared with 11.1 percent five years ago. And the far-right Alternative for Germany was on course to enter the last of Germany's 16 state parliaments with more than 12 percent.

The pro-business Free Democrats were seen winning above 7 percent and the Left Party around 6.5 percent.

Voters have appeared generally satisfied with Bouffier's outgoing state government. It was the first coalition between the CDU and the traditionally left-leaning Greens to last a full parliamentary term, and an unexpectedly harmonious alliance.

But only the Greens, who are in opposition nationally, benefited at the polls.

The projections left uncertain whether Bouffier's outgoing coalition would keep its parliamentary majority, and exactly what other combinations might be possible.

The election campaign in prosperous Hesse, which includes Germany's financial center of Frankfurt, has been largely overshadowed by the woes of a federal coalition that has been in office only since March. The state is home to 6.2 million of Germany's 82 million people.

Two weeks ago, two of the federal governing parties in Merkel's "grand coalition" of what have traditionally been Germany's strongest political forces — the Christian Social Union, the Bavaria-only sister to Merkel's CDU, and the Social Democrats — were battered in a state election in neighboring Bavaria.

The Social Democrats only reluctantly entered Merkel's fourth-term national government in March, and many are dismayed by what has happened since.

The government has been through two major crises, first over whether to turn back small numbers of migrants at the German-Austrian border and then over what to do with the head of Germany's domestic intelligence service after he was accused of downplaying far-right violence against migrants. It has failed to convince voters that it's achieving much on other matters.</s>BERLIN (AP) — German Chancellor Angela Merkel told her conservative party on Monday that she’s ready to step down as party leader following a pair of state election debacles, but plans to stay on as chancellor for the rest of her government’s term, German media reported.

Merkel also reportedly said that she won’t seek re-election to parliament after its current term ends, indicating that this will be her final term as chancellor — something that had been widely assumed but that Merkel has not until now confirmed.

Merkel, 64, had previously indicated that she planned to seek another two-year term as leader of her conservative Christian Democratic Union at a December party congress, but appeared to be moving quickly to acknowledge pressure for change as her fourth-term government struggles to gain traction.

Merkel has led the CDU since 2000 and has been Germany’s chancellor since 2005. There is no single obvious successor, but several potential contenders.

The current parliamentary term is due to expire in 2021, and the dpa news agency reported that Merkel said she won’t seek re-election.

She currently governs Germany in a “grand coalition” of what traditionally have been the country’s biggest parties — the CDU, Bavaria’s conservative Christian Social Union, and the center-left Social Democrats. Her fourth-term government took office only in March but has become notorious for squabbling.

An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground amid gains for both the Green party and the far-right Alternative for Germany party. Merkel’s party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens in Hesse.

The debacle followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

Citing unidentified party sources, dpa reported that Merkel told an ongoing CDU leadership meeting Monday that she’s prepared to step down as party leader but intends to remain chancellor. The mass-circulation daily Bild also reported that she said she won’t run again as party leader.

That’s a major concession for Merkel, who for years has insisted that the chancellor should also be party leader. But there is precedent for splitting the two jobs.

Merkel’s predecessor, Gerhard Schroeder, stepped down as leader of his center-left Social Democrats in 2004 as his government struggled, but remained chancellor until he narrowly lost an election 18 months later. Helmut Schmidt, West Germany’s chancellor from 1974 to 1982, never led the Social Democrats.

“The CDU faces a turning point,” Mike Mohring, a regional party leader from eastern Germany, told Welt television. “Angela Merkel knows best what to do, and now she has decided. And that demands respect.”

He said that it’s important to avoid “long personnel debates” and restore people’s confidence in the CDU as a governing party.

Merkel has dragged the CDU to the political center in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany’s nuclear power plants following Japan’s Fukushima disaster in 2011.

She allowed large numbers of asylum-seekers into Germany in 2015, many fleeing the fighting in Syria, declaring that “we will manage it,” before gradually pivoting to a more restrictive approach. That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU’s Bavaria-only sister party, the CSU, and helped the anti-immigrant Alternative for Germany party gain support.

The Social Democrats’ leader, Andrea Nahles, on Sunday demanded a “clear, binding timetable” for implementing government projects before the federal coalition faces an already-agreed upon midterm review next fall.</s>The German leader has also ruled out standing for a senior position within the EU with speculation growing she wants to quit politics completely. A party spokesman revealed Mrs Merkel will step aside from leading the country in 2021, in the wake of a disastrous regional election in Hesse. Angela Merkel’s party, the Christian Democratic Union, suffered a 10 percent slump in the polls yesterday, to win just 28 percent of the vote in the central German state elections. CDU sources said Mrs Merkel has told her party she will not stand as a candidate for Chancellor or MP after 2021 but she has not announced what her long term plans are.

Earlier today Mrs Merkel announced she would not stand for re-election as leader of the CDU during the selection process in December. During a CDU leadership meeting this morning, Mrs Merkel said she wanted to remain Chancellor until 2021. However political commentators have said this could leave the Chancellor sitting as a lame duck, especially given Mrs Merkel's previous comments that she believes the two positions should be linked. Mrs Merkel has been leader of the CDU since 2000, and Chancellor for 13 years, a period which has seen her dominate EU and world politics.. She has also ruled out running for a senior position in the European Union after the European parliament elections next year, members of her Christian Democrats (CDU) conservative party said. The move has led many to speculate she wants to quit politics altogether.

However the news that she was stepping down completely still came as a shock to CDU officials who thought last weekend's election results, which left her with no choice but to resign, were not as bad as feared. Friedrich Merz, a former parliamentary group leader of the CDU, has already through his hat into the ring to replace Mrs Merkel. Mr Merz was parliamentary leader of the CDU/CSU alliance 2000-2002 and was also a member of the European Parliament. He now serves as chairman of BlackRock Germany. While Mr Merz is ready to put his name forward for CDU leader, Mrs Merkel's rumoured preferred successor is the party's secretary general Annegret Kramp-Karrenbauer who has already announced her intention to stand.

German health minister Jens Spahn has also announced his candidacy to replace Mrs Merkel, according to Reuters. The 38-year-old critic of Angela Merkel told a closed meeting of senior CDU party officials in Berlin of his desire to run on Monday. Mrs Merkel has suffered a series of regional election setbacks which have undermined her authority and last weekend's results from the western state of Hesse were the final blow which left her with no choice but to quit. It is thought continued open door policies to Germany for migrants fleeing the Middle East crisis was largely to blame for her party's disastrous polls. Carsten Nickel, managing director at political consultancy firm Teneo, said: "We are witnessing a continuation of the pattern in place ever since Merkel's mistakes in the 2015 migration crisis: the gradual but steady erosion of her political power. "Rather than outright instability in Germany and Europe, it simply means a continuation of the current leadership vacuum." Although winning overall with 27 percent of the vote, the share was down 11 points from the previous poll which was held in 2013. Although winning overall with 27 percent of the vote, the share was down 11 points from the previous poll which was held in 2013.</s>BERLIN — Germany’s governing parties lost significant support in a state election Sunday that was marked by discontent with infighting in Chancellor Angela Merkel’s national government and prompted calls for her administration to get its act together quickly.

Projections showed Merkel’s conservatives heading for an extremely lackluster win in the vote for the central Hesse region’s state legislature. Her center-left governing partners were on course for a dismal result, running neck-and-neck with the Greens for second place.

Merkel’s conservative Christian Democratic Union was defending its 19-year hold on Hesse, previously a stronghold of the center-left Social Democrats, the chancellor’s federal coalition partners in Berlin.

There was widespread pre-election speculation that a disastrous result for either or both parties could further destabilize the national government, prompting calls for the Social Democrats to walk out and possibly endangering Merkel’s own position.

Andrea Nahles, the Social Democrats’ leader, said that “the state of the government is unacceptable.”

Projections for ARD and ZDF public television, based on exit polls and partial counting, gave the CDU 27-28 percent support and the center-left Social Democrats about 20 percent. When Hesse last elected its state legislature in 2013 they won 38.3 and 30.7 percent, respectively.

There were gains for the Greens, who were roughly level with Social Democrats at nearly 20 percent. And the far-right Alternative for Germany was on course to take more than 12 percent.

Geir Moulson is an Associated Press writer.</s>Angela Merkel has told her Christian Democratic Party (CDU) that she will not run for re-election as its chairwoman in December. Her decision is said to have come following heavy losses in regional elections for her party. A regional election in the German state of Hesse saw voters fleeing to the left and right of the party. The left-wing Greens and right-wing, anti-immigrant Alternative for Germany (AfD) saw their share of the vote increase dramatically.

However, the CDU got 27 percent of the vote, which was down 11.3 percent since the last election in 2013. This also marked the worst result for the party since 1962. This political blow is said to have threatened the governing coalition's solidarity. Mrs Merkel is one of the CDU's longest-serving chairpersons, after took on the role in 2000.

She has also led Germany as chancellor since 2005. "She will not stand again for the chairmanship of her party," A senior party source within the Christian Democratic Union told The Telegraph. This came a day after voters in the Hesse state punished her party in a regional poll. There are calls for The Social Democratic Party of Germany to abandon its coalition CDU, according to NBC.

The loss in votes is said to be being blamed on the government joining forces with the leading party instead of than staying in opposition as it had previously promised supporters. The party's leader Andrea Nahles is to present an "action plan" on Monday addressing concerns. The euro fell shortly after Mrs Merkel's announcement emerged, according to Bloomberg.
Voters in the German state of Hesse go to the polls to elect a new legislature. The election is widely considered a test for Angela Merkel's ruling CDU–SPD coalition.