Euro Declines to $1.1550 as France PM Presents Budget
The euro slipped to the $1.1550 level for the first time in three months as the US dollar trended positively in the forex markets on Tuesday.
The slide followed a fresh wave of buying enthusiasm which lifted the US dollar higher amid receding trade war jitters, Fed expectations, and the ongoing government shutdown.
The greenback is ticking higher for a second straight session as risk appetite returns. Most emerging market currencies are lower, led by the Mexican peso’s 0.65% pullback. Traders said the euro is not benefiting from the renewed trade tensions between China and the United States.
Recall the EUR/USD exchange rate rose on news that US President Donald Trump would respond to new Chinese export controls by imposing 100% tariffs on Chinese goods, set to take effect in November.
The markets wanted to believe that the President Trump and Treasury Secretary Bessent were right, China overreacted with the broadening and tightening of export licensing requirements for critical materials and de-escalation would result.
Euro seems caught between the US and China on one hand, and Russia’s war on Ukraine and its hybrid war on Europe. Poor economic data does it no favor, and the Dutch control of China-owned Nexperia set a dangerous precedent given the number of European and American companies with operations in China.
Meanwhile, France’s President Emmanuel Macron has a new government but has not made fresh concessions to secure a majority. It is still not clear that Prime Minister Lecornu will survive a confidence vote, likely later this week.
France’s Prime Minister Lecornu will present the budget to the National Assembly around today, and the euro may be sensitive to its reception.
Lecornu will address parliament for the first time as France’s prime minister after he was reappointed on Friday, just four days after resigning amid political infighting, and will deliver the closely watched policy speech to the National Assembly in Paris after presenting a draft budget to his cabinet.
Lecornu aims to put an over 30-billion-euro squeeze on the budget next year to get the fiscal deficit down to 4.7% of economic output.
But Lecornu already faces two possible no-confidence votes, and it is unclear if he has the votes to survive the end of the week. Read our liveblog to see how the day’s events unfolded. #Euro Declines to $1.1550 as France PM Presents Budget #
