Exit polls show the center-right Christian Democratic Union party leading, with the AfD party heading towards the strongest showing of the far-right since World War II.

Polls are open across Germany as the world’s third largest economy chooses a new leader to guide it through an era of febrile immigration debates and souring relations with Washington.

Germany's opposition conservatives won the national election on Sunday, putting leader Friedrich Merz on track to be the next chancellor while the far-right Alternative for Germany came in second, its best ever result, projections showed.

The Christian Democratic Union has won a plurality in the Bundestag, preliminary exit polls suggested Sunday, while the far-right AfD has come in second.

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.

"It is clear that this [the U.S.] government does not care much about the fate of Europe," says Friedrich Merz, who is set to be Germany's next chancellor.

Germany’s center-right CDU/CSU has won the February 23 parliamentary elections, with the far-right Alternative for Germany (AfD) securing second place, according to preliminary results. According to CNN,