Euro near two-month low as France faces political strain

The euro hovered around $1.16, near its more than two-month low of $1.154 reached last Thursday, as investors weighed political uncertainty in France and ongoing US-China trade tensions.

In France, Sebastien Lecornu— the country’s fifth prime minister in two years—resigned last Monday, only to be reappointed on Friday. He now faces a narrow path to political survival as he prepares to present a draft budget bill by Monday’s deadline.

To secure its passage through a fractured parliament, Lecornu is seeking to convince both the Socialists and the center-right Republicans to either abstain or offer conditional support in the crucial budget vote. Encouragingly, a majority of deputies oppose dissolving parliament, suggesting a viable path to adopting the budget may exist.

Meanwhile, US President Trump struck a more conciliatory tone toward China on Sunday, just two days after threatening 100% tariffs on Chinese imports in response to Beijing’s move to tighten export controls on rare earths.