EUR rose against other major currencies in the European session on Monday, gaining some ground after last week’s declines that followed French president Emmanuel Macron’s unexpected call for snap parliamentary elections after a defeat by Marine Le Pen’s National Rally (NR) in European-Union vote.
Macron’s surprise decision raised worries about political uncertainty in France, the Eurozone’s second-biggest economy if the far-right NR party wins a majority. The first round of parliamentary elections is to be held on June 30.
The latest opinion polls reportedly indicate that the NR is on course to win 35% of the votes in the first round. It will be followed by an alliance of leftwing parties, gaining 26%. Macron's centrist alliance will get only 19%.
Investors also weighed the data, which showed that wages in the Eurozone surged 5.3% YoY in the first quarter of 2024, following an upwardly revised 3.2% YoY rise in the previous quarter. This marked the biggest increase since the fourth quarter of 2022.
Despite strong wage data, the ECB’s chief economist Philip Lane stated that he still sees a fair amount of confidence about the destination in the second half of next year. The official also called the policymakers to interpret the incoming data carefully and to differentiate the noise and the signal. Lane also noted that there is no reason to be overly concerned about the financial turbulence in France, triggered by political risks.