Back to the Blog Main Page
10/07/24
165
EUR Flat on French Politics
On Wednesday, the euro was steady amid political uncertainty.
EUR/USD was 0.1% higher at 1.0819 and remained lower than Monday’s near-one-month peak of 1.0845 after the second round of parliamentary elections in France.
The poll led to a surprising election win for the leftist alliance in the country after the far-right National Rally had won the first round This means France now faces the possibility of a hung parliament.
ING analysts said in a note it was clear that coalition talks in France would be lengthy and complicated. Although markets may likely prefer the technocratic solutions over others, it may take weeks to break the gridlock. Analysts were worried that such immobility would lead to the bond market getting unnerved.
GBP/USD traded up 0.1% higher at 1.2801, close to Monday’s 1.2845, the highest since Jun. 12, after Thursday’s general election.
USD/JPY traded up 0.2% at 161.56 in Asia, getting close to recent 38-year highs again.
Producer price index inflation data in Japan showed that although factory inflation in June picked up, it was still relatively weak. This increased doubts over whether the Bank of Japan would have enough motivation to keep hiking rates.
USD/CNY traded up 0.1% at 7.2760, as the yuan weakened after Chinese CPI inflation declined in June.
Promotions
