Friday, June 14, 2024

The euro falls after Macron announced new elections


French President Emmanuel Macron cast his vote in the European Union elections on Sunday. On Sunday evening, he announced new elections. Photo: Hannah McKay / AP / NTB

Of NTB | 10.06.2024 04:43:02

Economy and business: – I can’t pretend that nothing has happened, Macron said on Sunday evening after the National Assembly became the clear largest party in the French EU elections.

He said that the rise of nationalists is a danger to the country and to Europe.

Macron’s announcement then sent shockwaves through currency markets. In morning trade in Asia, the euro fell 0.3 percent to its lowest level in one month against the US dollar at $1.0764. Measured against the British pound, the euro fell to 84.60 pence.

Macron has set June 30 as the date for the first round of the election for the new National Assembly, and the second round on July 7.

– It will probably be bad news for the markets to some extent. It adds an unexpected element of uncertainty, says chief economist Holger Schmieding in Berenberg.

– The prospect of a far-right victory in France’s new elections could put short-term pressure on the euro, says chief economist Mansoor Mohi-Uddin at the Bank of Singapore.

– It is obvious that the new election is a new source of uncertainty, and that it can lead to a certain degree of negative impact on economic and market confidence, at least in France, says chief market analyst Jan von Gerich at Nordea.

At the same time, he points out that EU election results cannot always be transferred to national election results, as it involves different electoral systems and that EU elections tend to attract protest votes to a greater extent.

(© NTB)


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