EBC Markets Briefing | ​Euro shakes off France political crisis

The euro edged higher on Tuesday, just shy of the highest level since late July. Its appreciation was restrained as France's parliament brought down the government over plans to tame ballooning national debt.

French lawmakers voted to oust PM François Bayrou Monday, plunging the country into a new political crisis and leaving it without a government at a time of increasing economic strain and geopolitical tensions.

Bayrou will now be forced to step down after just nine months in office, following in the footsteps of his predecessor Michel Barnier, who lost a no-confidence vote last December.

The upshot is that France's fiscal mess is unlikely to be fixed anytime soon. Macron will name a new prime minister in the coming days, but the opposition parties have grown impatient with his pick.

Investors plan to increase their hedge fund exposure to prefer Europe over the US for the first time since 2023 due to trade policy uncertainty and Germany's fiscal stimulus, a BNP Paribas survey showed last month.

Around a third of hedge funds surveyed planned to increase hedge fund investments in the Asia-Pacific region and Europe, whereas 14% said they would invest in North American-based hedge funds, the report said.

The single currency broke out of its trading range decisively, favouring a bullish bias. The next hurdle could be the high of 1.1780 it hit in July.

EBC Financial Group 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 Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.