The euro and German stocks rallied on Monday as investors welcomed Germany’s election result that put centrist parties on track to form a coalition, although optimism was tempered by potentially tricky negotiations over economic policy.

The German election may fuel optimism about potential fiscal policy reform, which is expected to revitalise Europe's largest economy. The euro and the DAX could strengthen further amid the projected result.

The euro posted gains early on Monday after Germany's opposition conservatives secured the national election, as expected, while the dollar trod

The euro nudged higher on Monday after Germany's opposition conservatives won the national election as expected, while the dollar trod water amid worries over the growth outlook for the U.S economy. Friedrich Merz was set to become Germany's next chancellor after his party emerged victorious in Sunday's election,