French President Emmanuel Macron will speak to the nation on Thursday after Prime Minister Michel Barnier was ousted following a no-confidence vote. Barnier’s budget, which included significant deficit cuts, faced strong opposition from both Marine Le Pen’s far-right National Rally and the left-wing New Popular Front. This led to Barnier’s resignation, and Macron is now looking for a new prime minister, with names like Defence Minister Sébastien Lecornu and Interior Minister Bruno Retailleau being considered.
Meanwhile, the Eurozone is facing slow economic growth, with GDP expected to grow by just 0.8-1.2% in 2024. While inflation has eased from 2022, it remains a concern, and the European Central Bank (ECB) is likely to continue raising interest rates. This could support the Euro, but any economic slowdown or recession risks might weaken it. The ECB’s decisions on interest rates will be key, as higher rates usually help the Euro, but caution could put pressure on the currency.
Global factors, including U.S. Federal Reserve policies and geopolitical risks like the war in Ukraine, will also affect the Euro. If the Fed lowers rates, the Euro might strengthen against the dollar, but geopolitical instability could create volatility. The Euro has remained stable recently, staying within the $1.05-$1.0597 range. As Macron deals with political challenges and the ECB manages inflation, the Euro’s future will depend on both domestic and global factors.
