The common currency slid to its lowest in a month against the dollar after French President Emmanuel Macron and German Chancellor Olaf Scholz were trounced by far right parties in European elections Sunday. With the results leading the former to call a snap legislative ballot at home beginning on June 30, options markets show traders expect bigger swings and further losses.
A gauge of volatility in the euro over the next month surged to the highest since mid-May. Pricing in the options market shows traders have turned bearish on the common currency at the fastest pace in over a year, leaving sentiment the most negative since April. Strategists are focused on the potential impact to France’s economic outlook in particular, with the country’s banking stocks sliding Monday. Investors may also start questioning European resolve toward closer fiscal and financial integration, according to Credit Agricole’s Valentin Marinov.
Whether it’s another move up or a dive down, traders are bracing for added volatility wrought by Wednesday’s dual macroeconomic catalysts: a report on consumer prices in the morning and the Federal Reserve’s rate decision in the afternoon.MANAMA, Bahrain — Missile attacks by Yemen's Houthi rebels struck two ships in the Gulf of Aden, authorities said Sunday, the latest assaults on shipping in the region.