EUR/USD remains vulnerable on France's political crisis, downbeat data
EUR/USD is heading south for the second consecutive day on Tuesday. The pair trades near 1.1675 at the time of writing, with France's political and fiscal crisis spooking investors while an unexpected decline in German Factory Orders add to evidence of the weak momentum of the region's leading economies.
French Prime Minister Sébastien Lecornu shocked markets on Monday with his decision to resign from the government after only 27 days in charge and a few hours after announcing his new cabinet. President Emmanuelle Macron has asked Lecornu to negotiate a way out of the crisis with the governing coalition leaders, but opposition parties on the left and right are calling for a new snap election, and the president's credibility is severely damaged.
In this context, ECB President Christine Lagarde declared on Monday that the disinflationary process is over, while the bank's Vice President Luis de Guindos warned about geopolitical risks and weak domestic growth, suggesting that the possibility of another rate cut is still on the table.
Macroeconomic data released earlier on Tuesday has confirmed those fears, as German Factory Orders contracted against expectations in August. In the US, the Government shutdown enters its seventh day, and Trade Balance figures will be delayed, but a slew of Federal Reserve (Fed) policymakers, including the Vice Chair of Supervision, Michelle Bowman, and US President Donald Trump's new appointment, Stephen Miran, will take the stage and might set the US Dollar's direction.
Source : Fxstreet
