Merkel, promising to create a 'grand coalition', is finding the feat ever more challenging as some of her colleagues have resigned while several leaks have provoked more controversy. With setbacks occurring frequently, which are stalling the nation's political machine, it is not surprising the euro is falling.

             In addition to political insecurity, social unrest greatly determines the value of a nation's currency. Again, common sense dictates that a country in the midst of social turmoil is not a prudent choice for investment and business. France is presently experiencing a protracted series of riots throughout the nation; they are due to the perceived and real marginalization of some minorities (particularly Arabs). The state's inability to effectively and efficiently quell the riots only worsens the situation. What's more, there are fears the riots may spread to neighboring countries, many of which also have significant minority populations. In fact, there is evidence to suggest this is already the situation. Cars were set on fire in Germany and Brussels, identical to the acts of violence and vandalism now taking place in France. There is no doubt the real social disturbance coupled with the apparent threat of additional social upheaval adversely affects the value of the euro. In other words, unsafe social conditions and the expectation of further outbursts result in a depreciating euro.

             Yet another factor that influences a currency's worth is the monetary policies a country institutes. Obviously, policies and practices that promote stability, growth, investment, and business are those that logically attract others, thereby increasing the value of a nation's currency. For an example of this notion, one may again look to current European events and conditions. The European Central Bank (ECB) is considering an interest rate hike, the first in more than 2.5 years, but has not yet given investors many details.