Currency boost for anyone heading to Europe on holiday soon

-Credit: (Image: Zowy Voeten/Getty Images)

The announcement of an election in France has had a ripple effect through Europe - and saw the Euro take a sharp downward turn on Monday. The currency dropped to a near two-year low against the pound.

As of Monday, the Euro was sitting at €1.07 to the dollar and €1.18 against the Pound. The last time the currency dropped by this amount was in mid-2022, with the invasion of Ukraine causing it to dip below the dollar for the first time in two decades, reports WalesOnline.

The rate reflects the political uncertainty after the European Parliament elections over the weekend. The elections saw a big defeat for President Macron’s Renaissance party and Germany’s centre-left SPD party.

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The National Rally party won 31.4 percent of the vote, which was more than double that of President Marcon’s centrist alliance. The defeat prompted the President’s surprise announcement to dissolve parliament and call a snap election.

The first round of the French election is set to take place on June 30. Marcon’s opposition, Marine Le Pen who previously led the National Rally, has welcomed the decision, declaring her party is “ready to take power if the French give us their trust”.

However, Paris’ mayor Anne Higaldo branded the move “extremely unsettling” and told France24 she was “stunned” at the timing with barely two weeks before the Olympic Games is set to start in the French capital.

As a result of the political chaos, French banks have slumped with shares in three major banks falling between 5.4 and 4.1 percent. The sudden and drastic drop has also seen the French CAC 40 index at its lowest point since February.

Despite the surprise results in France and the Euro’s plunge at the start of the week, market analysts at Deutsche Bank told The Guardian that national government stability in other major eurozone economies is “unlikely to be affected” by the EU Parliament results.

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