Feds approach pressures Euro

EUR/USD shows weakness near the immediate support of 1.0720 in Tuesday’s American session. The major currency pair remains on the back foot as the Euro shifted into a bearish trajectory following French President Emmanuel Macron’s unprecedented decision to dissolve parliament and call for a snap election, which spooked political stability. 

Macron’s decision to call for a snap election came after exit polls for EU parliamentary elections showed that seats won by Jordan Bardella-led-far-right National Rally came in at 32%-33%, more than twice the votes secured by Macron’s Centrist alliance. 

European Central Bank (ECB) policymakers' cautious approach to the interest rate outlook also fails to uplift the Euro. ECB policymakers worry that progress in inflation towards the bank’s target could stall as wage growth appears to be stubborn. On Monday, ECB President Christine Lagarde said in an interview that last week’s rate-cut move doesn’t commit to any linear declining path. "There might be periods where we hold rates again,” Lagarde said, according to Reuters.