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EUR/USD sinks below 1.0800 as Macron calls snap election

The euro has been hit hard to start the week as President Macron announced a snap election, sparking concerns and volatility across European markets.
Source: Getty Images
Picture of Glen Frybarger
Glen Frybarger
Senior Content Strategist, Chicago

Data current as of 6/10/2024

Key points

  • President Macron boldly calls for a snap election after his party disappoints in EU elections
  • EUR/USD hit a 1-month low to start the week below 1.0750
  • EUR/GBP hit a 22-month low below 0.8500

French president Macron dissolves parliament after stunning defeat

In a dramatic reaction to his party's unexpected loss in the European elections, French President Emmanuel Macron has called for snap elections in the upcoming weeks. This move aims to regain legislative control and stability within the French government, reflecting a strategic pivot to address the electoral setback and gains made by the opposing far-right party.

Uncertainty caused EUR/USD to gap lower Sunday night

As a result of the weekend news, EUR/USD experienced a gap in prices, opening over 10 pips lower on Sunday night. This gap underscores the market's nervous response to the political uncertainty arising from the recent developments in Europe’s political arena.

EUR/USD continued below 1.0750

Following its initial drop, the euro continued its descent during the London trading session on Monday, eventually recovering slightly to 1.0760 in the afternoon. The currency's decline from Friday's 1.0900 level was influenced not only by European political turmoil but also by strengthening of the US dollar driven by unexpectedly robust US employment data.

EUR/GBP hits 22-month low

Similarly, the EUR/GBP pair fell to a 22-month low, trading below 0.8500. This movement has been driven by the relative political stability in the UK, which has bolstered demand for the pound compared to the euro, highlighting the impact disparities in economic perceptions and stability can have on currency pairs.

How to trade EUR/USD

  1. Open an account to get started, or practice on a demo account
  2. Choose your forex trading platform
  3. Open, monitor, and close positions on EUR/USD

Trading forex requires an account with a forex broker like tastyfx. Many traders watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

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Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.

Reviewed by:
Frank Kaberna
Director of Strategy, Chicago

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