Euro steady as French government collapses

The euro held above $1.17, hovering near its strongest level since late July, after French Prime Minister François Bayrou was ousted in a parliamentary confidence vote over the budget, a result that markets had widely anticipated.

The defeat brought down his minority government and deepened France’s political crisis. President Emmanuel Macron must now appoint his third prime minister in just one year.

Markets are also looking ahead to Thursday’s European Central Bank meeting, where policymakers are expected to leave rates unchanged for a second consecutive time, amid persistent trade uncertainty and steady eurozone inflation, which has remained on target for three straight months.

Across the Atlantic, attention is fixed on this week’s US inflation report. Weaker labor market data last week strengthened the case for a Federal Reserve rate cut in September, with investors increasingly pricing in the possibility of a larger-than-usual move.