Currency: Euro May Go For A Toss As French Parliamentary Mayhem Ensues
In an interesting development, French President Emmanuel Macron has dissolved the nation’s parliament and its national assembly based on the predicted exit poll results. France is currently gearing up for its electoral elections, in which the next prime minister of the nation will be selected to helm national affairs.
However, the French parliament mayhem ensued the moment Macaron called for snap elections after the exit poll results predicted his looming fall. The development also poses significant threats to the euro currency as a whole, as changing political dynamics are capable of toppling the French financial sphere to new lows.
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Macaron and Parliament Dissolution: What’s Happening To Euro?
With changing world dynamics, French PM Emmanuel Macron took a bold step recently by announcing the dissolution of the French parliament. The decision to dissolve the legislature and national assembly was inspired by the exit poll predictions of Macaron’s party’s defeat by 31.5%.
Later, in a long, one-hour address to the nation, Macaron shared his reasoning behind his parliamentary dissolution step, urging the citizens to vote earnestly.
“I have decided to give you back the choice of your parliamentary future by voting. I am therefore dissolving the National Assembly this evening. This decision is serious and heavy. But it is, above all, an act of trust. Trust in you, my dear compatriots. In the capacity of the French people to make the most just decision,” the French President shared.
The EU elections are dubbed the second-largest in the world after India. With almost 400 million voters in check, the elections mark a significant change in governance, which is responsible for helming a variety of international and national matters of grave importance.
Implications For The Euro
The sudden parliamentary pivot and the dissolution have sent shockwaves within the French financial realm. Post the dissolution announcement, the French financial realm opened to weak bond market statistics. The stress-led EU elections forecast compelled bond market statistics to portray a 10-head OAT bund spread, widening by 7-8 basis points.
At the same time, the Euro is also expected to face initial skirmishes within the current electoral climate. The currency prediction suggests the euro may hover around the 1.07/08 mark. The Euro/USD date is also facing stiff resistance in the market. The US dollar has gained prominence in the market, with gold hitting new lows in the global financial domain.
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Post the snap election announcement, Euro documented a steep price fall of 0.5%, trading at a one-month low of $1.075. The French blue-chip stocks also noted a sharp price decline as they fell to hit new lows. The uncertainty about EU elections could prove detrimental to the euro, spreading additional mayhem in the sector.
If the political mayhem persists for long, the implications of it could wreak havoc in the French financial sphere. In such a case, the euro could plummet to new lows. The development can also be indicative of significant stock hits that the French market can encounter in the process.