French President Emmanuel Macron has announced a significant shift in the nation's nuclear policy, adopting a 'forward deterrence' model to address rising threats from Russia and China. The new strategy involves integrating European allies into nuclear drills and deploying nuclear-capable Rafale jets to allied nations. This move marks one of the most substantial changes to French strategic doctrine since the end of the Cold War, aiming to solidify France's leadership in European defense. However, the Kremlin has issued a stern warning, stating that any nuclear presence in or near Ukraine would trigger a direct military response. These escalating geopolitical tensions are expected to drive demand for safe-haven assets like Gold (XAU/USD) while creating volatility for the Euro and the CAC 40 index. Market participants are closely monitoring the situation as the risk of military escalation weighs on European equity markets and defense sector valuations.
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