The euro rose on Monday against a basket of global currencies, resuming gains that had been temporarily halted on Friday against the US dollar. The euro is once again close to touching a two-week high, amid easing political concerns in France, the eurozone's second-largest economy.
Sébastien Lecornu's government survived two no-confidence votes in the French parliament last week, particularly after gaining some support following a decision to suspend pension reform until after the 2027 presidential election.
Price overview
Today's Euro exchange rate: The Euro rose against the Dollar by 0.2% to ($1.1674), from today's opening price of ($1.1651), and recorded a low of ($1.1650).
The euro ended Friday's trading down 0.3% against the dollar, its first loss in four days, due to corrections and profit-taking, after earlier hitting a two-week high of $1.1728.
The euro rose 0.3% against the dollar last week, its second weekly gain in three weeks, thanks to positive political developments in France.
US dollar
The dollar index fell 0.15% on Monday, resuming losses that had halted Friday's recovery from a two-week low, reflecting the greenback's renewed decline against a basket of global currencies.
This decline comes amid the near-certainty that the Federal Reserve will cut US interest rates twice in October and December, with the aim of halting the ongoing deterioration in the US labor market.
Political developments in France
French Prime Minister Sébastien Lecornu announced last week the suspension of the 2023 pension reform until after the presidential elections scheduled for 2027. This move was aimed at easing political and social tensions and came in response to intense pressure from left-wing lawmakers who believed that proceeding with the reform could threaten the political stability of the new government.
With this move, Lecornu survived two no-confidence votes in the French parliament, securing a temporary reprieve for his government and the opportunity to present a budget for the eurozone's second-largest economy.
Analysts believe these developments reflect a shift toward less austere fiscal policies compared to the previous government, indicating Lecornu's desire to appease the French public and bolster confidence in his fledgling government.
European interest
Money market pricing for the European Central Bank to cut interest rates by 25 basis points in October is currently stable at less than 10%.
Traders reduced their bets on the European Central Bank easing monetary policy, indicating that this year's interest rate-cutting cycle has ended.
To re-price the above probabilities, investors are awaiting the release of several economic data releases from Europe, in addition to following comments from European Central Bank officials.
