Select Language

EUR/USD weakens below 1.1650 as French political crisis deepens

Breaking news

EUR/USD weakens below 1.1650 as French political crisis deepens

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.10.08 13:04
EUR/USD weakens below 1.1650 as French political crisis deepens

update 2025.10.08 13:04

  • EUR/USD softens near 1.1620 in Wednesday's Asian session.
  • Political uncertainty in France exerts some selling pressure on the Euro. 
  • Trump said his administration plans to eliminate a number of government programs as a result of the ongoing shutdown. 

The EUR/USD pair attracts some sellers to around 1.1620 during the Asian trading hours on Wednesday. The Euro (EUR) weakens against the US Dollar (USD) amid fears of a political crisis in France. The FOMC Minutes will take center stage later on Wednesday. 

The shared currency remains under pressure following the resignation of France's Prime Minister Sebastien Lecornu on Monday. France is now likely to miss a deadline to present its 2026 budget bill, meaning lawmakers will need to pass emergency stopgap legislation to authorize spending from January 1 until a full budget is approved.

Across the pond, the US government shutdown entered its eighth day as US senators failed to pass spending proposals to reopen the federal government. US President Donald Trump said on Tuesday that his administration plans to lay off federal workers if the shutdown persists beyond Monday, adding that he would provide details of job cuts within the next four or five days.

A prolonged US federal government shutdown could undermine the Greenback and help limit the major pair's losses. Investors are also now pricing in a 25 basis points (bps) rate cut at the Federal Reserve (Fed) meeting in the October meeting, with an additional cut expected in December.

Euro FAQs

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.


Date

Created

 : 2025.10.08

Update

Last updated

 : 2025.10.08

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

GBP/JPY trades firmly near yearly high above 204.00 on fading BoJ hawkish bets

The GBP/JPY pair exhibits strength near a fresh yearly high around 204.50 during Wednesday's European trading session, posted earlier in the day.
New
update2025.10.08 14:52

NZD/USD Price Forecast: Extends dovish RBNZ-inspired fall below mid-0.5700s, six-month low

The NZD/USD pair extends the previous day's sharp retracement slide from levels just above mid-0.5800s, or a nearly two-week high, and attracts heavy selling for the second straight day on Wednesday.
New
update2025.10.08 14:33

GBP/USD loses momentum below 1.3400, BoE Pill's speech and FOMC Minutes in focus

The GBP/USD pair loses ground near 1.3390 during the early European session on Wednesday. The Pound Sterling (GBP) edges lower against the Greenback amid rising expectations that the Bank of England (BoE) will cut interest rates one more time in the remainder of the year. 
New
update2025.10.08 14:32

FX option expiries for Oct 8 NY cut

FX option expiries for Oct 8 NY cut at 10:00 Eastern Time via DTCC can be found below.
New
update2025.10.08 14:30

Gold extends record-setting rally beyond $4,000; shrugs off a broadly firmer USD

Gold (XAU/USD) is prolonging its recent record-setting rally and building on the momentum beyond the $4,000 psychological mark during the Asian session on Wednesday.
New
update2025.10.08 14:26

USD/CHF revisits monthly high slightly above 0.8000 as US Dollar trades firmly

The USD/CHF pair revisits the monthly high around 0.8010 during the Asian trading session on Wednesday. The Swiss Franc pair strengthens as the US Dollar (USD) extends its upside despite the United States (US) government shutdown entering its second week.
New
update2025.10.08 14:09

AUD/JPY Price Forecast: Holds gains above 100.00, overbought RSI warrants caution for bulls

The AUD/JPY cross extends its upside to around 100.05 during the early European session on Wednesday. The Japanese Yen (JPY) faces some selling pressure against the Australian Dollar (AUD) as traders assess the likely policy stance of Japan's next Prime Minister, Sanae Takaichi.
New
update2025.10.08 13:55

US Dollar Index rises to near 99.00 due to safe-haven demand, FOMC Meeting Minutes eyed

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is extending its gains for the third successive day and trading around 98.90 during the Asian hours on Wednesday.
New
update2025.10.08 13:54

USD/INR flattens as investors seek fresh cues on US-India trade deal

The Indian Rupee (INR) opens on a flat note again around 88.90 against the US Dollar (USD) on Wednesday.
New
update2025.10.08 13:39

India Gold price today: Gold rises, according to FXStreet data

Gold prices rose in India on Wednesday, according to data compiled by FXStreet.
New
update2025.10.08 13:35

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel