Ella 
EUR/USD is trading in a narrow range around the key support level of 1.0700 in early European trading on Monday. The pair has been under pressure as the potential risk of a financial crisis in France and firm speculation that the far-right National Rally (RN) party led by Marine Le Pen will form a new government will have an adverse impact on the country’s fiscal situation, thus weakening the appeal of the euro.
French Finance Minister Bruno Le Maire said on Friday that the eurozone’s second-largest economy would be at risk of a financial crisis if the far right or left wins because they both have huge spending plans, according to Reuters.
On the monetary policy front, European Central Bank (ECB) policymakers have been reluctant to provide a trajectory for rate cuts as they remain concerned about the stubbornness of the outlook for wage growth, which could trigger price pressures again.
On Sunday, Martins Kazaks, a member of the ECB’s Governing Council and the governor of the Bank of Latvia, said the ECB must not let inflation remain above 2% until 2026. Kazaks added: “Right now, I think we’re still on track to get to 2% in the second half of 2025, and I really hope we’ll be there by then.”
