On Sunday, French President Emmanuel Macron called for early elections. His decision came after the far-right National Rally party led by Marine Le Pen achieved very strong results in the European elections held in Sydney.
- Le Pen achieved the largest gains in the European Parliament elections
- The Greens and Liberals lost ground
- Macron announced that he had decided to dissolve the National Assembly
- He called for legislative elections to be held on June 30 and July 7
EUR/USD fell slightly due to political uncertainty. I don't have a PhD in French politics, but I will say that EU election results do not translate directly into local election results. Local elections have a different electoral system, and higher levels of “protest votes” do not occur in local elections to the same extent.
But this appears to put Macron further away from a majority in parliament than he has been so far. This is likely to increase periods of gridlock in the French Parliament and increase uncertainty in EU policies, economies and markets.