The euro was relatively steady while European stock markets fell on Monday, as France prepared to deal with a hung parliament after a left-wing coalition came out on top in the election race.
Eyes are also on data due this week from the United States and the euro zone for further clues on the path of global monetary policy.
Euro stabilizes
The euro fell at the start of trading on Monday after signs emerged that Sunday’s French parliamentary elections would likely lead to a hung parliament, adding further uncertainty to the country’s path toward fiscal and monetary policy. But the European currency steadied against the dollar.
The euro fell 0.1% to $1.08235, having earlier fallen as much as 0.4% as traders weighed the implications of a hung parliament in France, but the European currency steadied at $1.0842.
The French election results forecasts indicated several surprises, including the left-wing New Popular Front coalition coming in first place and the right-wing National Rally party led by Marine Le Pen, which is skeptical of EU membership, coming in last place after being the favorite to win the most votes in the polls before.
Voting yesterday, Sunday.
Stocks are falling
By 07:11 UTC, the pan-European STOXX 600 index was down 0.1%, weighed down by energy stocks tracking lower oil prices.
France’s stock market fell 0.4 percent, the biggest loser in Europe, as Paris prepares to deal with a hung parliament and begin negotiations on Monday to form a government after a surprise left-wing surge thwarted Marine Le Pen’s bid to bring the far-right to power.
Markets are awaiting CPI data from the US and Germany which will provide an indication of the future path of interest rates.
