The value of the Euro has fallen sharply amid political uncertainty in Europe after French President Emmanuel Macron called a snap General Election.
The singly currency dropped to an almost two-year low against the pound, falling half a cent this morning (June 10) to $1.0753.
Trading on the pound reached as high as €1.1829 this morning, up half a euro cent.
The European Union is going through a period of uncertainty after Eurosceptic nationalist groups made the biggest gains in the elections to the European Parliament over the weekend.
President Macron has called a snap election with the first round on June 30, after the National Rally party has gained many seats in the European Parliament elections.
Shares in French banks have also slumped as a result, with shares in Société Générale falling 5.4 percent today, while BNP Paribas shares fell 4.4 percent and Credit Agricole shares have fallen 4.1 percent.
The sudden drop means the French CAC 40 index has now dropped to its lowest point since February.
As reported in The Guardian, market analysts at Deutsche Bank are predicting EU policy will shift after the election results over the weekend.
The group said: „While the elections did not bring a seismic shock to EU-level politics, they are still likely to shift the direction of travel for policy over the next five years.
„The biggest impact of the election result could be at a national level with President Macron announcing the dissolution of the French parliament after the defeat of his Renaissance party.
„Snap elections are called for June 30. Domestic government stability in other major eurozone economies is unlikely to be affected by the elections (despite the electoral defeat of Scholz’s SPD).“
Chancellor Olaf Scholz’s SPD party was hit with its worst ever results in a European election, as it came third behind Alternative for Germany (AfD).
UK stocks have also taken a hit with the FTSE 100 share index dropping by 27 points, or 0.33 percent, reaching its lowest point since the end of May.
This includes share in major banks NatWest and Lloyds, which are both down 1.8 percent.
Russ Mould, AJ Bell investment director, said the EU election results introduce „a big dose of uncertainty“.
He said: „Financial stocks were among the worst performers in London as investors digested the news.
„Also affecting sentiment were Friday’s better-than-expected US jobs numbers which push back against the narrative that rate cuts are imminent.“
Stocks in water firm Pennon, owner of South West Water, have dropped 1.3 percent.
The water supplier came under fire after there were 46 cases of waterborne disease cryptosporidium in an area of Devon last month.
South West Water CEO Susan Davy said at the time: „Our ground technicians have been working around the clock to identify the source of the contamination and rectify the situation so we can resume a normal water supply.
„To those in the affected area and our customers across the South West, I am truly sorry for the disruption and wider anxiety this has caused.
„While incidents like these are thankfully very rare, our customers expect a safe, clean, and reliable source of drinking water.“
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