The euro edged higher against the U.S. dollar on Tuesday as France’s ongoing political turmoil stirred uncertainty, while the South Korean won regained ground after an initial plunge following a brief declaration of martial law.
In Europe, heightened concerns over political instability in France added pressure to the euro. French Prime Minister Michel Barnier faces a crucial no-confidence vote over a controversial budget proposal that includes tax increases and spending cuts. Analysts believe the outcome could mark a turning point in the crisis. Despite its struggles, the euro saw a modest rise of 0.1%, trading at $1.0507, as volatility in eurozone markets remained high.
Meanwhile, the South Korean won experienced significant fluctuations. The currency hit a two-year low after President Yoon Suk Yeol unexpectedly declared martial law during a televised address, citing threats to the nation’s democracy. However, the situation quickly reversed when lawmakers overwhelmingly rejected the decree, prompting Yoon to lift martial law. The won recovered some losses, trading at 1,418.35 per U.S. dollar, though still down 1% on the day.
The U.S. dollar also showed mixed performance. It briefly gained after October job openings data suggested continued labor market strength. However, Federal Reserve officials refrained from signaling their next policy move, leaving markets uncertain ahead of the upcoming rate decision. The dollar index remained relatively unchanged at 106.33.
Elsewhere, the Japanese yen strengthened slightly against the dollar, trading at 149.55 yen, as speculation grew about a potential interest rate hike by the Bank of Japan. The Chinese yuan, however, continued to face pressure, slipping to its weakest level in over a year amid economic concerns and trade tensions.
Currency markets remain volatile as investors navigate a mix of political uncertainty, economic data, and central bank policies. These factors are expected to drive market sentiment in the weeks ahead.
