The EUR/USD currency pair dropped significantly, decreasing by more than 0.6% to hit $1.049 due to worsening political issues in France. This has raised doubts about the Eurozone’s stability.
In France, the far-right political group has threatened to bring down Prime Minister Michel Barnier’s government through a vote of no confidence, intensifying a dispute concerning the national budget.
ECB May Cut Interest Rates by 50 Basis Points
Additionally, cautious statements by European Central Bank (ECB) representative Martins Kazaks have led to predictions of potential interest rate decreases. The market increasingly expects a reduction of 50 basis points in December, although a smaller cut of 25 is still more probable.
Also, a decrease in the rate of inflation for services, and concerns about possible U.S. tariffs contributed to the euro’s decline. These issues contributed to the euro falling by 3% in November, marking its most significant drop over a year.
