FX.co ★ Euro Strengthens as France Survives Confidence Vote

The euro advanced to $1.165, climbing further away from its two-month low of $1.154 seen on Tuesday, following the French government's successful avoidance of a no-confidence vote. This political stability resulted from Prime Minister Sebastien Lecornu's decision to halt a major pension reform, garnering backing from some left-leaning legislators. Concurrently, the US dollar faced downward pressure as Federal Reserve Chair Jerome Powell pointed out the fragility in the labor market. The Federal Reserve's Beige Book, released on Wednesday, further indicated a deceleration in the US economy. This aligns with expectations for another interest rate cut this month. In contrast, the European Central Bank predicts that interest rates will likely remain steady. In the meantime, tensions between the US and China have intensified following China's recent expansion of restrictions on the export of rare earths. This move was met with criticism from high-ranking US officials, though it is anticipated that Presidents Trump and Xi Jinping will convene in South Korea later this month.