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08/07/24
173
EUR Higher Despite Shocking French Election Result
On Monday, the euro began the week by gaining and is traded at about 1.0836, up 0.33% for the day in the European session. EUR/USD came off its best week of the year, gaining 1.19%.
France has been in political turmoil over the last two weeks and the wild ride isn’t done yet. After parliamentary elections in Europe saw the far-right gaining strongly, President Macron called a snap election in June. Macron hoped that scared French voters would vote for his centrist coalition, but things didn’t work out like that. France went to the polls twice in two weeks and each round resulted in an unexpected result.
The far-right National Rally party of Mary Le Pen in the first round won the most votes and appeared well on its way to becoming the biggest party in parliament and possibly even gaining a majority.
The next round was also surprising, with the National Rally placing third, followed by Macron’s centrist alliance, and the left-wing alliance winning the most votes.
The political system is now in gridlock, without a clear winner. The left-wing alliance did not achieve a majority and Macron must now select a prime minister who will have to form a government. This may lead to an unwieldy coalition or a minority government.
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