The Euro well insulated from French government collapse

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waterman
Written by Dan Waterman
September 9th 2025
The Pound continues to stabilise..

GBP v EUR has recovered to a 1-week high and is now trading at the same level as this time last month. GBP v USD has gained 1.5% in the last 7-days and is too back to the same level as this time last month.

More gains are needed (£-€ in particular) if Sterling is to 'survive' a very uncertain looking Autumn/Winter period, but things are at least improving slightly in the right direction.

The Pound ended last week with yet another UK economic boost which saw retail sales beat expectations in July. The summer data has so far offered fruitful data and therefore we should be at least a little bit optimistic that Friday's GDP result can be better than the 0% expected.

Elsewhere, as expected the Euro has yet to come under pressure from the no confidence vote of French Prime Minister Francois Bayrou. Yes political uncertainty is bad business and if this was the UK, maybe things would look different.

However, the rise and falls of French Government's in recent times is nothing new as the country continues to struggle on all fronts. Bayrou's tenure of 9-months beat Barnier's 3-months and so there is some hope the new PM (who is due to be announced this week) will last longer again. 

France and the Euro are not out of sight yet though, things can still deteriorate and cause volatility from here. It's just there are a few more 'bigger' problems at play that traders are more interested in for keeping profits high and more importantly safe.