The Euro Gets a Lift After France’s Surprise Election Twist
The euro touched a fresh high following France’s snap election. Marine Le Pen’s National Rally (RN) topped the first round, but the margin wasn’t as huge as market eyes had expected.
This scorecard put a dent in worries about a runaway RN victory possibly sparking big‑scale fiscal fireworks. Investors breathed a sigh of relief.
Still, the Road Ahead Is Anything but Smooth
While RN showed up strong, the second round hangs in the balance. That uncertainty is a warning sign for traders who are keeping a tight leash on political risks.
- Currency upside could stay capped: Political fog may keep investors cautious, limiting how far the euro can climb.
- Bond markets cautious: French 10‑year yields stay sticky. They’ve even narrowed the gap with German bonds, but the underlying uncertainty keeps them on edge.
- Spending worries: Both the far right and left want to boost budgets. That mix makes the fiscal outlook volatile.
US Dollar Takes a Chill Dip
The dollar cooled against a cluster of currencies as chatter grew that the Fed might press rate cuts later this year. Why? The latest PCE inflation data in May rose 2.6% YoY—exactly what the market had pegged.
In short, the euro feels the lift, but political and fiscal clouds are still circling. The dollar’s dip signals a subtle market realignment as expectations shift.
