COMMENT-Liz Truss moment for France could guillotine euro

EUR/USD might sink to 1.00 if a government led by Marine Le Pen's National Rally (RN) takes power in France next month and upends the country's budget like the Liz Truss administration did in the UK.

The probability of an RN-led government increased on Tuesday's call from Republicans (LR) chief Eric Ciotti for an alliance between his party's candidates and the RN.

A poll published earlier this week forecast the LR would win 40-55 seats in the National Assembly. Combining those with the 235-265 forecast for RN may be enough for an absolute majority, although it is by no means certain (289 needed).

RN has proposed higher public spending, despite already significant levels of French debt.

EUR/USD was last at parity in November 2022 - two months after GBP/USD plunged to a historic low of 1.0327 courtesy of "Trussonomics".

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