- EUR/GBP falls to 0.8450 as the Euro is weighed down by the Eurozone’s political uncertainty.
- French President Emmanuel Macron called for a snap election.
- The next move in the Pound Sterling will be guided by the UK’s Employment data for quarter-to-April.
The EUR/GBP pair declined to a 20-month low near 0.8450 in Monday’s European session. The cross fell on its face after French President Emmanuel Macron's unexpected call for a snap election spooks the Eurozone’s political stability, resulting in significant selling pressure on the Euro overall.
The unexpected move by French Macron came after exit polls showed record seats of Marine Le Pen’s far-right National Rally (RN) in European parliamentary elections under the leadership of the party’s president, Jordan Bardella. Far-right seats were more than double from Macron’s centrist list at 32%-33%.
On the monetary policy front, European Central Bank (ECB) policymakers appear uncomfortable considering subsequent rate cuts as they cautioned about inflation remaining stubborn ahead. On Friday, ECB policymaker and President of the Deutsche Bundesbank Joachim Nagel warned that inflation could become sticky, especially in the service sector, due to firm wage growth prospects.
In addition to ECB Nagel, ECB policymaker Robert Holzmann, who didn’t vote for a rate cut in last week’s monetary policy when the Deposit Facility Rate was lowered for the first time in five years, cautioned that inflation could increase again if the Fed maintains a hawkish stance for a longer period.
Meanwhile, the Pound Sterling will dance to the tunes of the United Kingdom’s (UK) Employment data for the February-April period, which will be published on Tuesday. The ILO Unemployment Rate is estimated to have remained steady at 4.3%.
Investors will also pay attention to Average Earnings (excluding and including bonuses), which are expected to grow steadily. Stable wage growth would dampen market speculation about Bank of England (BoE) rate cuts.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats to 1.0700 area following post-PCE jump
After spiking to a daily high of 1.0720 with the immediate reaction to US PCE inflation data, EUR/USD lost its traction and declined to the 1.0700 area. Investors remain cautious ahead of this weekend's French election and make it difficult for the Euro to gather strength.
GBP/USD stays below 1.2650 after US inflation data
GBP/USD struggles to preserve its bullish momentum and trades below 1.2650 in the American session on Friday. Earlier in the day, the data from the US showed that the annual core PCE inflation declined to 2.6% in May, limiting the USD's upside and helping the pair hold its ground.
Gold keeps its daily gains near $2,330 following US PCE data
Gold prices maintain their constructive bias around $2,330 after US inflation readings gauged by the PCE matched consensus in May and US yields advance slightly across the curve.
BTC struggles around the $62,000 level
Bitcoin price faces pullback resistance at the lower band of the descending wedge around $62,000. Ethereum price finds support at $3,288, the 61.8% Fibonacci retracement level. Ripple price faces resistance at $0.500, its daily resistance level.
French Elections Preview: Euro to suffer after the calm, as specter of extremists, uncertainty rise Premium
The first round of French parliamentary elections is set to trigger high uncertainty. Soothing messages from the far right and far left leave the Euro vulnerable to falls. Calm may return only after the second round of voting on July 7.