The euro rose in European trading on Monday against a basket of global currencies, resuming its advance after a brief pause on Friday against the US dollar and moving once again toward its two-week high as political tensions in France the eurozones second-largest economy continued to ease.

The government of Prime Minister Sbastien Lecornu survived two no-confidence votes in the French Parliament last week, buoyed by renewed support following his decision to suspend the controversial 2023 pension reform until after the 2027 presidential election.

Price Overview

The euro rose 0.2% to 1.1674 dollars from an opening level of 1.1651 dollars, after touching a session low of 1.1650 dollars.

On Friday, the euro fell 0.3% against the dollar its first decline in four sessions due to profit-taking after reaching a two-week high of 1.1728 dollars earlier in the day.

For the week, the euro gained 0.3% against the dollar, marking its second weekly rise in three weeks, supported by improving political sentiment in France.

US Dollar

The dollar index fell 0.15% on Monday, resuming its decline after Fridays temporary rebound from a two-week low, reflecting renewed weakness in the US currency against a basket of global peers.

The retreat comes as markets now fully price in two interest-rate cuts by the Federal Reserve in October and December, aimed at halting the continued deterioration in the US labor market.

Political Developments in France

Prime Minister Sbastien Lecornu announced last week the suspension of the 2023 pension reform until after the 2027 presidential election a move intended to ease political and social tensions following strong opposition from left-wing lawmakers who warned that pressing ahead with the reform could destabilize the new government.

The decision allowed Lecornu to survive two no-confidence votes in Parliament, giving his administration temporary breathing space and an opportunity to present a new budget for Europes second-largest economy.

Analysts see the move as a shift toward less-austere fiscal policies compared with the previous government, signaling Lecornus intent to calm public discontent and strengthen confidence in his young administration.

European Interest Rates

Money-market pricing for a 25-basis-point rate cut by the European Central Bank in October remains below 10%.

Traders have scaled back bets on further monetary easing, indicating that the current rate-cutting cycle is likely over for this year.

Investors now await upcoming European economic data and comments from ECB officials for clues on the future policy path.