EBC Markets Briefing | Euro dragged lower by political turmoil
The dollar was buoyant on Tuesday as political turmoil in France undermined the euro. The single currency was the weakest G10 currency last month and the selloff has not halted.
France's far-right National Rally President Jordan Bardella said his party would likely back a no-confidence motion in the coming days unless there were a "last-minute miracle".
That means Michel Barnier could be the shortest-lived prime minister in France’s Fifth Republic. His proposal of deficit reduction was dismissed by both left and populist right.
A gauge of the premium investors demand to hold French debt hit its highest level since 2012, during the euro area's sovereign debt crisis. Macron’s dissolution of parliament may have far-reaching implications.
US manufacturing activity improved in November, with orders growing for the first time in eight months. The resilience of the world’s largest economy is another headwind confronting the euro.
Trump marked a shift from his prior advocacy of a weaker dollar by demanding BRICS member countries commit to not creating a new currency or supporting another currency.
The euro was supported by 1.0460, and we see a short-term rally as more likely. But the resistance at 1.0600 could prove hard to clear.
EBC Capital Market Consulting Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Trading Platform Security or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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