The euro rose and Paris equities surged Monday on signs France’s far right would not win enough seats for an overall majority in legislative elections.
The single currency had come under pressure in recent weeks on worries Marine Le Pen’s National Rally (RN) would storm to victory and push through big-spending policies that could put the country on a collision course with the European Union.
However, while polls suggested the party was on course to win the most seats in the 577-member National Assembly, it was unclear if it could garner enough to take full control.
President Emmanuel Macron called for a “broad” alliance against the far right in the second round, which will see run-off votes where there was no outright winner in the first round.
The euro climbed to as high as $1.0777 Monday, with some predicting it could rise further as other parties embark on horse-trading to limit the RN’s gains.
Paris’s CAC 40 rose more than two percent and its level stands at 7,632.99, while Frankfurt and London were also in the green.
“A hung parliament looks very possible,” said Neil Wilson at Finalto trading group. “This could reduce the chance of a big spending splurge, but wouldn’t exactly help sort France’s fiscal position, which is already quite fragile.”
With AFP
