Around 11:30 a.m., the European currency lost just 0.09% against the greenback, at 1.0499 dollars, and lost 0.12% to the British currency, at 82.82 pence per euro.
The euro fell slightly on Wednesday, holding its breath before a vote in the afternoon which could lead to the fall of the French government, plunging the country into great political and budgetary uncertainty.
Around 10:30 a.m. GMT (11:30 a.m. CET), the European currency lost just 0.09% against the greenback, at $1.0499, and lost 0.12% to the British currency, at 82.82 pence per euro.
In France, Prime Minister Michel Barnier took responsibility for the Social Security budget on Monday, leading to the tabling of two motions of censure, from the left and the right. They will be examined from 3:00 p.m. GMT by the National Assembly.
The far-right National Rally (RN) party has already announced that it will vote for the motion tabled by the left-wing New Popular Front group.
By joining their voices, the two camps can gather around 330 votes, well beyond the 288 required to bring down the government, a gesture not seen since 1962.
If this motion is adopted, around 7:00 p.m. GMT, “which seems likely, France will be burdened by a heavy budget deficit while a new political vacuum will open,” summarizes Susannah Streeter, analyst at Hargreaves Lansdown.
In the absence of a suitable budget to support the economy, it could then fall to the European Central Bank (ECB) “to stimulate demand through even lower rates in 2025”, estimates Matthew Ryan, analyst at Ebury.
The president of the monetary institution Christine Lagarde is also due to speak to the European Parliament on Wednesday.
The financial markets are also awaiting several reports on American employment, including that of the ADP firm published later during the session, and that of the Ministry of Labor on job creations in November, scheduled for Friday.
Extending a “gradual” approach to monetary easing, Bank of England Governor Andrew Bailey is considering four key rate cuts next year, he confirmed in a pre-recorded interview revealed Wednesday during the Global Boardroom organized by the Financial Time.
If these are cuts of a quarter of a percentage point each, their magnitude in 2025 would be in line with the scenario presented by the BoE at its November meeting, and used for its inflation and growth projections.
The pound was only temporarily affected by these comments.
