EUR/USD falls on French political risk and Trump’s defence of the Dollar

EUR/USD declines on Monday as the French government faces a potential vote of no confidence. 

The US Dollar strengthens due to Donald Trump’s threat to hit BRICS countries with 100% tariffs. 

Dovish commentary from ECB’s Martin Kazaks adds to the negative sentiment around the Euro.

EUR/USD is trading over half a percent lower on Monday, with a single Euro (EUR) buying about 1.0500 US Dollars (USD) as New York awakes to the sound of alarm clocks and scent of coffee. 

The pair is falling as a political crisis threatens to overturn the French government, weighing on the Euro whilst President-elect Donald Trump gives the Dollar a boost by threatening to impose tariffs on BRICS nations unless they give up their search for an alternative to the Dollar. 

The Single Currency is depreciating as France faces a political crisis of a gravity not seen since 1962. Michel Barnier’s minority government could face a vote of no confidence as attempts to get a controversial Budget through parliament. 

Due to lacking an overall majority, Barnier relies on the backing of the French Far right National Rally (NR) party but they have demanded major concessions to the Budget, curbing the austerity of the original plan which sought to reign in government spending and narrow the country’s relatively wide deficit.