The euro fell 0.7% to $1.1664 on Monday after the surprise resignation of French Prime Minister Sebastien Lecornu, just a month after taking office. The fall also weighed on French stocks, reflecting concerns about political instability in Paris.
Lecornu, a close ally of President Emmanuel Macron, resigned after his new cabinet was criticized by some as too right-wing, others as not influential enough. The split in the French parliament without a majority has added to uncertainty about the direction of Macron's administration.
The resignation comes as the country prepares for snap parliamentary elections in 2024, marking a period of increasingly shaky politics. Lecornu is Macron's fifth prime minister in two years, reflecting continued political pressure on his rule.
In Asia, the Japanese yen fell 2% to 150.45 per dollar after Sanae Takaichi won the election to lead the Liberal Democratic Party, paving the way for her to become Japan's first female prime minister. His victory was seen as a support for loose monetary policy and increased government spending.
The US dollar index rose 0.7% to 98.41, supported by weakness in the euro and yen. Japanese bond yields rose while other Asian currencies remained cautious amid the ongoing US government shutdown.
