Euro rose in European trade on Monday against a basket of major rivals, holding its ground above six-week lows while still under heavy pressure amid political uncertainty in France.

Global markets expect French President Emanuel Macrons party to lose the upcoming legislative elections to the far right.

Such developments could disrupt the markets and especially the government debt situation, which has already reached worrisome levels.

Media sources said the European Central Bank is not considering emergency purchases of French bonds to support them even after a sharp selloff last week.

The Price

The EUR/USD pair rose 0.1% today to $1.0712, with a session-low at $1.0686.

Euro lost 0.35% against the dollar on Friday, marking six-week lows at $1.0668.

It also lost 0.9% last week, the second weekly loss in a row, and the largest since early April amid mounting geopolitical tensions.

Frances Political Situation

Markets will continue to focus on French politics this week, especially after the surprise win by the far-right French party in the European Parliament elections.

The markets expect Emanuel Macrons centrist party to lose the legislative vote in the upcoming snap elections, which means a likely far right candidate as Prime Minister, which could deteriorate Frances debt situation.

The French-German 10-year bonds gap widened heavily as investors continue to sell off French bonds due to political concerns.

French Budget

The European Commission warned that Frances 2024 budget might violate the blocs financial rules on debt.

The Commission asked the French government to take necessary steps to adhere to EU financial rules and regulations.

The Commission now expects Frances debt to GDP ratio to rise to 110% by 2025.

French Credit Rating

The SP credit rating company downgraded Frances credit last Friday, pouring cold water on the efforts by the French government to reorganize its financial affairs.