Euro Slides as French Elections Lead to Hung Parliament and U.S. Dollar Gains Ground

The euro declined on Monday following French elections that resulted in a hung parliament. Meanwhile, the U.S. dollar inched up from a three-week low after U.S. payroll data suggested an impending Federal Reserve interest rate cut. Concerns over a potential French exit from the eurozone eased, providing some market relief.

The euro slipped on Monday, coming off overnight lows against the dollar after French elections led to a hung parliament. The U.S. dollar crept up from a more than three-week low as U.S. payrolls data on Friday boosted expectations of a Federal Reserve rate cut.

French President Emmanuel Macron asked his prime minister to remain in office amid complex negotiations to form a new government following an unexpected left-wing surge. Garth Appelt of Mizuho Americas noted, 'We're waiting to see if the coalition can secure 240 to 250 lawmakers to form a working government.'

Concerns over a French eurozone exit receded as Marine Le Pen’s National Rally failed to secure a majority, said Helen Given of Monex USA. 'People are just happy to have it off the table,' she remarked.