the euro falls by 1% against the dollar!

(Boursier.com) — Very complicated start to the week for the euro, which widened its losses during the session and now lost almost 1% against the dollar, at $1.047 between banks. The political uncertainty in France around the vote on the 2025 budget and the risk of seeing Michel Barnier’s government fall are weighing more and more on the single currency. The Prime Minister activated article 49.3 of the Constitution to have the National Assembly adopt the draft Social Security budget (PLFSS) for 2025. The National Rally (RN) was quick to react, announcing in immediately he would vote to censure the government.

This motion can only be examined within at least 48 hours after its filing, i.e. Wednesday. She must collect 289 votes to bring down the executive. Jordan Bardella, the president of the far-right party, confirmed on ‘X’ that the RN will vote on the motion of censure: “There is no way out for a government which reconnects with the thread of macronism, which refuses to take into account the social emergency at the end of the month and which ignores the need to revive growth.

In the event of the fall of the government, Thomas Zlowodzki, at Oddo BHF, estimates that the OAT-Bund spread could further deviate by at least 20 bp, and French shares could fall by 5%. “Still in this hypothesis, if a new government is not appointed quickly, the specter of Emmanuel Macron’s resignation could drive French sovereign spreads higher, and French equities lower.” “Whether the government falls or not, France’s problems are bigger than that,” finally underlines Robert Dishner, senior portfolio manager at Neuberger Berman on ‘Bloomberg TV’. “The direction of the movement seems to indicate that we are going to see French spreads widen.”