EURUSD climbs to around 1.0770 after the first round of France’s legislative elections revealed far-right supremacy, albeit by a narrow margin.

EURUSD rises 0.50% to a more than two-week high near 1.0770 during Monday’s European session. The major currency pair improves. As exit polls of the first round of France’s legislative elections on Sunday showed that Marine Le Pen’s far-right National Rally (RN) is in a solid position. Although with a lesser majority than expected and a significant The US dollar has undergone a correction.

The uncertainty surrounding the RN attaining an outright majority has greatly increased the Euro’s attraction. “We might actually get less fears of more expansionary and unsustainable fiscal policy if the far-right party did a little bit worse,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

Investors are awaiting the preliminary German HICP and US ISM Manufacturing PMI for June.

Now, investors will focus on the second-round runoffs. Which are set for July 7. On the monetary policy front. Investors are looking for signs that the European Central Bank (ECB) may slash interest rates again. The ECB began lowering interest rates in early June after maintaining. A restrictive interest rate policy for two years to combat pricing pressures caused by pandemic-related stimulus.

Moreover On Monday, the primary trigger for the Euro will be the The preliminary German Harmonized Index of Consumer Prices (HICP) statistics for June will be released at 12:00 GMT. Economists predict the Eurozone’s largest economy’s annual HICP will climb at a slower pace of 2.6%, down from 2.8% in the previous edition. The monthly Consumer Price Index (CPI) is predicted to increase at a faster rate of 0.2% from 0.1% in May.

Furthermore The scenario in which German inflation falls as projected or quicker will raise expectations of early rate cuts by the ECB. Whereas hot statistics will dampen the ECB’s eventual rate cut prospects.

This week’s primary trigger for the Euro will be the preliminary Eurozone HICP data for June, which will be released on Tuesday.

Daily market movers: EURUSD rises higher. the US dollar weakens.

EURUSD rises to 1.0770 as the US Dollar corrects. Following the projected decrease in the United States’ (US) core Personal Consumption Expenditures Price Index (PCE) data for May. Which reinforced expectations of early rate cuts by the Federal Reserve. The US PCE report indicated on Friday. That core PCE inflation data, the Fed’s preferred inflation metric, fell to 2.6% from 2.8% in the previous edition.
Moreover According to the CME FedWatch tool, 30-day Federal Fund futures price data indicates. That the chance of rate reduction in September is 63.4%. The numbers also indicate that the Fed is expected to cut rates twice this year, rather than once. As projected by policymakers in their most recent dot plot.
The United States Dollar Index (DXY), The Greenback’s value against six major currencies falls to around 105.40.
This week, the US Dollar is predicted to be highly volatile. As numerous economic statistics are scheduled for publication. During Monday’s session, investors will be closely watching the ISM Manufacturing Purchasing Managers’ Index (PMI) report for June. Which will be released at 14:00 GMT.

Economists estimate manufacturing activity to rise to 49.0 in June from 48.7 in May.

Economists estimate manufacturing activity to rise to 49.0 in June from 48.7 in May. But to remain contracted, as a figure below 50.0 distinguishes between expansion and contraction. However, the preliminary S&P Global PMI data released on June 21 revealed. That the US Manufacturing PMI jumped to a three-month high of 51.7 from the reading of 51.3 in May.
Furthermore In the PMI report, investors will focus on Other sub-components. Such as the New Orders Index and Price Paid. which represent the factory outlook and change in the manufacturing sector’s input prices, respectively, will provide clues regarding inflation predictions.