By Harry Robertson and Dhara Ranasinghe
LONDON (Reuters) – The euro fell on Sunday after exit polls for the ultimate spherical of the French parliamentary elections pointed to a hung parliament, with the left wing New Well-liked Entrance grouping unexpectedly set to win probably the most seats.
Europe’s single foreign money was final down 0.3% at $1.08, though volumes remained skinny as early buying and selling in Asia bought underway. It additionally dipped in opposition to sterling and the yen.
“It looks like the anti-far right parties really got a lot of support,” mentioned Simon Harvey, head of FX evaluation at Monex Europe.
“However basically from a market perspective, there’s no distinction by way of the result. There’s actually going to be a vacuum in terms of France’s legislative potential.”
Analysts said a period of volatility and uncertainty was expected to continue as investors now assess what final form the parliament will take, and how much of their policies the leftist alliance will be able to implement.
The New Popular Front alliance says its first moves would include a 10% civil servant pay hike, providing free school lunches, supplies and transport while raising housing subsidies by 10%.
The euro had climbed final week as polls recommended a hung parliament was probably, assuaging fears of a far proper victory, after dropping sharply – together with shares and bonds – when Macron known as the elections in early June.
“The bond market is going to be the real place to look at. There might be a bit of a gap lower in French bonds (prices),” Harvey added.
