The value of the euro has dropped to its lowest level in nearly a month after Emmanuel Macron called for new parliamentary elections in France following a humiliating defeat in the vote for seats in the European Parliament.

The French president’s gamble comes after Marine Le Pen’s hard-right National Rally won 32pc of the vote – more than double that of the president’s Renaissance on 15.4pc– underlining her credentials as frontrunner for France’s next presidential election.

Mr Macron will be betting that Ms Le Pen’s party cannot do the double when voters go to the polls on June 30, shortly before the start of the Olympic Games in Paris.

However, the uncertainty has already impacted markets, sending the euro down 0.4pc against the pound at 84p and by 0.5pc versus the dollar to $1.07.

If the far-right National Rally party wins a majority in France, the French president would be left without a say in domestic affairs.

Berenberg chief economist Holger Schmieding said: “That is probably somewhat bad news for markets. It introduces an unexpected element of uncertainty.”

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