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Lebanese Ministry of Health: One person was killed in an Israeli airstrike on a car in the town of Burj Qalawieh, south Lebanon.
Al Mayadeen correspondent: The first ship of the Maghreb fleet delivering aid to break the siege on Gaza departs from the port of Gammarth in Tunisia.
Channel 12: Airspace closed at Ramon Airport due to fears of drone infiltration
IOF Spokesperson: Sirens sounded over an aircraft infiltration in the Bir Ora area, and details are being examined
Drone infiltration sirens sound north of the Gulf of Aqaba
Al Mayadeen's correspondent in Gaza: The Israeli occupation carried out five extremely violent raids on the western areas of Gaza City
Al Mayadeen's correspondent in Gaza: The Israeli occupation carried out major bombings in the Gaza Strip, the most violent since October 7
Yemeni Armed Forces spokesperson Brigadier General Yahya Saree: The missile force carried out a major operation using the Palestine 2 ballistic hypersonic missile, hitting several targets in occupied Yafa.
Sirens sound in large areas of occupied Palestine after a missile launch from Yemen was detected
Al Mayadeen's correspondent: 14 martyrs arrive at al-Shifa Hospital following Israeli massacre of al-Sultan Family north of Gaza.

Euro plummets, as Macron's snap election call shakes markets

  • By Al Mayadeen English
  • Source: Agencies
  • 10 Jun 2024 11:38
4 Min Read

The euro reaches a one-month low of $1.07485 during Asian trading hours following Macron's call for an election in an attempt to assert his authority.

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  • Euro banknotes are displayed on a table in Munich, Germany on March 30, 2022. (AP)
    Euro banknotes are displayed on a table in Munich, Germany on March 30, 2022. (AP)

The euro experienced a significant decline on Monday due to political uncertainty following French President Emmanuel Macron's announcement of a snap legislative election.

Meanwhile, the dollar remained strong in anticipation of the Federal Reserve's upcoming meeting later in the week. The dollar's strength was bolstered by a jobs report on Friday that surpassed expectations, reducing speculation of imminent rate cuts and indicating that the US Central Bank might delay the onset of its easing cycle this year.

The euro reached a one-month low of $1.07485 during Asian trading hours following Macron's call for an election in an attempt to assert his authority, prompted by gains made by the far-right in the European Union vote.

Eurosceptic nationalists saw significant advances in the European Parliament elections on Sunday, as indicated by an aggregated exit poll, although center, liberal, and socialist parties were poised to maintain a majority.

The euro has declined by 0.44% to $1.0753 and has experienced a decrease of over 2.5% against the dollar this year. Additionally, it dropped to its lowest level since August 2022 against the pound and decreased by 0.2% against the yen. Charu Chanana, head of currency strategy at Saxo, noted that the euro has faced a dual challenge from the robust US jobs data released on Friday and the political instability in Europe.

The European Central Bank implemented a rate cut last week as anticipated but provided limited indications regarding the future of monetary policy due to inflation persisting above target levels.

Meanwhile, markets in China, Hong Kong, Taiwan, and Australia are shut for holidays.

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The dollar index, gauging the US currency against six counterparts, increased by 0.18% to 105.25, reaching nearly a one-month peak of 105.30 earlier in the session.

Jobs data impact Fed rate cut expectations

Data released on Friday revealed that nonfarm payrolls surged by 272,000 jobs last month, surpassing expectations from a Reuters poll, which anticipated 185,000 jobs. Prior estimates ranged from 120,000 to 258,000.

Market expectations for Federal Reserve cuts have now shifted to 36 basis points this year, down from nearly 50 basis points or at least two cuts projected before the jobs data. The likelihood of a rate cut in September has decreased to approximately 50%, compared to around 70% on Thursday. The Federal Reserve is scheduled to meet on Tuesday and Wednesday, with predictions suggesting rates will remain unchanged.

The focus will be on Chair Jerome Powell's remarks and potential alterations to economic projections. Additionally, US inflation data is set to be released on Wednesday.

Moh Siong Sim, a currency strategist at Bank of Singapore, noted that markets will exercise caution and await the inflation report and the outcome of the Fed meeting for clearer direction.

Yen dynamics and pound's standstill

The Bank of Japan is set to convene for its two-day monetary policy meeting on Thursday and Friday, with widespread expectations for the central bank to maintain short-term interest rates within the 0-0.1% range. According to Reuters, BOJ policymakers are exploring strategies to reduce bond purchases and may introduce fresh guidance.

The Japanese yen depreciated to 157.13 on Monday and remains near the 34-year low beyond 160 per dollar recorded at the end of April. This prompted Japanese officials to expend around 9.8 trillion yen ($62.46 billion) on currency intervention to bolster it.

Meanwhile, the British pound saw minimal movement at $1.27145 after touching $1.2700, its lowest level in a week earlier in the session.

Read next: How US economy benefits from war in Europe: WSJ

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