The euro falls sharply after French President Macron called a surprise general election following his heavy defeat in yesterday's European Parliament elections.
➡️ The euro is trading sharply lower, falling to a new one-month low, following the results of the European Parliament elections in France showing that far-right parties won 40% of the votes, while President Macron's party took only got the 15%. Surprisingly, President Macron has called an immediate general election, which polls suggest will likely bring the far right to power in France for the first time since World War II. Although the main far-right party is no longer pushing for an exit from the common currency, a victory for the far right will put a strain on the euro and could provide traders with an opportunity to short the common currency. However, the biggest gains in this election clearly went to the more moderate right than to the far right.
➡️ Average US earnings and non-farm payrolls data released last Friday were higher than expected, spooking markets in a shift in risk-off sentiment that saw the US dollar gain and stock markets somewhat depressed. Average hourly wages increased by 0.4% when a month-over-month increase of only 0.3% was expected, while net new nonfarm jobs reached 272,000 when only 180,000 were expected. This will dampen rate cut expectations a bit and is a bit bullish for the greenback. As a result, stocks mostly fell in Asia today, while the major US indexes held up better. The NASDAQ 100 Index it is still trading above 19000.
➡️ In the Forex market, the strongest major currency since the Tokyo open is the Australian dollar, while the euro is the weakest major currency. As the US dollar is also gaining ground and is trading near its one-month high price, the EUR/USD currency pair is clearly the center of attention.
➡️ There are no major data releases expected today, so other than the Euro, it will likely be a relatively quiet day on the markets.
Credit by DailyForex.com
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