Euro declines after victory of far-right in EU Parliament elections

10 Jun 2024 , 08:50 AM

On Monday, the euro fell along with stock and bond futures, after victory of far right parties in EU Parliament elections.

In early morning Asian trade, the euro dropped 0.3% to a one-month low of $1.0764 and then plummeted to a 21-month low of 84.60 pence.

French bond futures marginally declined and EuroSTOXX 50 equity futures down 0.4%, continuing a sharp decline that began late last week.

After Sunday’s vote, centre, liberal, and socialite parties were expected to hold onto their majority in the European Parliament. However, nationalists gained the most ground, casting doubt on the ability of powerful nations to shape EU policy.

In an audacious attempt to regain control, Macron convened a first-round parliamentary election for June 30.

Macron would be left without a voice in domestic issues should the far-right National Rally party secure a majority in parliament.

Macron would be left without a voice in domestic issues should the far-right National Rally party secure a majority in parliament.

Important U.S. elections are in November, and there is a general election in Britain on July 4. However, markets have recently become brittle due to a decrease in expectations for a rate cut in the United States.

The currency has down over 2.5% compared to the dollar this year, primarily due to the relative outlooks for interest rate cuts in the US and the euro region. The European Central Bank announced its first rate drop in five years last week.

Concerns over France’s high debt levels have escalated this year, and there may be increased attention paid to how the economy will be affected by the return of political unpredictability.

Days before the EU election, Standard & Poor’s withdrew its rating on France’s sovereign debt last month, dealing a severe blow to the government’s management of the tight budget.

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