EUR/USD steadies amid French political turmoil and prolonged US shutdown

• EUR/USD steadies, snapping a four-day losing streak after slipping to a two-month low the previous day.
• French President Emmanuel Macron faces pressure to appoint a new prime minister by Friday evening.
• US government shutdown enters day 10 with no Senate vote expected until Tuesday.

The Euro (EUR) is showing signs of stabilization against the US Dollar (USD) on Friday, pausing a four-day losing streak as the Greenback softens modestly. At the time of writing, EUR/USD trades near 1.1588, up around 0.22% on the day, after dipping to a two-month low on Thursday. Even with the mild rebound, the pair remains on course for its sharpest weekly drop since July, weighed by political turbulence in France.

The Euro came under sustained selling pressure earlier in the week after French Prime Minister Sébastien Lecornu resigned just hours after unveiling his cabinet, making his tenure one of the shortest in modern French history. The abrupt resignation rattled investor confidence and deepened concerns over political deadlock within the Eurozone's second-largest economy.

President Emmanuel Macron is under pressure to appoint a new prime minister by Friday evening as his government still needs to pass a budget before year-end. While snap elections are seen as unlikely for now, they remain a last-resort option if coalition talks fail.

In the United States (US), attention remains on the ongoing government shutdown, which has now entered its tenth day with no resolution in sight. The Senate is not expected to hold another vote until Tuesday. Prolonged gridlock is raising concerns over potential economic fallout if the impasse continues into mid-October.

The shutdown has already delayed the September Non-Farm Payrolls (NFP) report, and if the standoff persists into next week, the Consumer Price Index (CPI) release scheduled for Wednesday could also be disrupted. However, a Bloomberg report indicated that the Bureau of Labor Statistics (BLS) has recalled some staff to complete the CPI dataset, suggesting the report will likely be released before the Federal Reserve's (Fed) October 29-30 monetary policy meeting.

Earlier in the day, the preliminary University of Michigan Consumer Sentiment Index for October showed a slight improvement, coming in at 55.0, above the 54.2 forecast but just below September's 55.1 reading. The Consumer Expectations Index edged down to 51.2 from 51.7, while inflation expectations were little changed. The 1-year inflation outlook eased modestly to 4.6% from 4.7%, and the 5-year measure held steady at 3.7%.