The euro slips to one-month lows with Macron and Scholz debacle at the European elections

ECB Stournaras three cuts in 2024 are the most likely

(Finance) – The euro falls to its lowest point in the last month against the dollar after the European elections. In particular, the disappointing results of the leaders of the two largest countries of the Old Continent have an impact: French President Emmanuel Macron and German Chancellor Olaf Scholz were defeated by far-right parties, leading the former to call an early election in an attempt to stop the rise of her far-right rival, Marine Le Pen.

The EUR/USD exchange rate quote 1.0753 as of 8 a.m. ET on Monday morning, compared to 1.0817 on Friday, when it had already weakened following strong U.S. labor market data.

According to the latest available data on the votes counted and projections, the party is expected to Le Pen will get about 32% of the vote, with a rival far-right group winning about 5% and Macron’s party holding out at 15%.

Scholz’s Social Democrats in Germany got just 15% of the vote, their worst ever result in a European election, with the main conservative opposition coming first with 31% and the far right Alternatives for Germany which should end up at 15%, tied with the SPD.

The exchange rates this week will also be affected by the central banks. It is not expected that the Fed make any changes at this week’s meeting, but the focus will be on comments from Fed Chair Jerome Powell and changes to economic projections. US inflation data will also be released on Wednesday.

No surprises are also expected from the meeting of Bank of Japanin which the central bank is expected to keep short-term interest rates in a range of 0 to 0.1%.

(Photo: Mika Baumeister on Unsplash)