Euro falls, sovereign bond rates rise as French government is on the verge of collapse

The exchange rate market fluctuated when the French government was on the verge of collapse as it handled the social security finance bill, which is at the heart of next year's budget, without a vote from the House of Representatives.

As of 4:10 p.m. local time on the 2nd, the euro exchange rate plunged 1.01% to $1.0470 per euro on the Paris foreign exchange market from the previous trading day and fell to 0.21% to 0.8287 per euro.

The CAC40, the leading French stock index, also fell as much as 1.2% in early trading on a possible government collapse.

The interest rate on France's 10-year Treasury rose 0.027 percentage point to 2.923%, with rising bond rates indicating lower prices.

After French Prime Minister Michel Barnier announced that he would use government privileges from constitutional provisions to deal with social security finance legislation, opposition parties have signaled a vote of no confidence in the government, which has affected the market with increased political uncertainty.

S&P, an international credit rating agency, said on the 29th of last month that while maintaining France's sovereign credit rating at the same AA- (double A minus), political conflict could affect future evaluations.