By Ankur Banerjee

SINGAPORE (Reuters)

The euro was subdued on Thursday following the expected collapse of the French government, raising concerns about the region's second biggest economy. Meanwhile, bitcoin surged past $100,000 for the first time.

The world's leading cryptocurrency has been on a significant upswing since November, driven by expectations that Donald Trump's U.S. election win would create a more favorable regulatory landscape for cryptocurrencies.

It reached as high as $101,626 during Asian market hours, and was last up 3% at $100,882, marking a year-to-date increase of 138%.

> "If we are talking about where we go from here, there's reason to believe this thing could keep going," said Kyle Rodda, a senior financial market analyst at Capital.Com.

> "With reduced regulatory risk, the ongoing appeal of non-fiat assets due to the perception of U.S. fiscal irresponsibility, and escalating geopolitical risks, there are positive factors that could drive prices higher."

The euro was trading at $1.052175, maintaining tight ranges in Asian hours but close to its two-year low of $1.03315 set in late November, as traders anticipate a prolonged crisis for France.

French lawmakers approved a no-confidence vote against the government on Wednesday, further deepening the crisis that undermines its legislative capabilities and efforts to address a substantial budget deficit.

> "The fall of the government means that political uncertainty will persist, adversely impacting business and consumer confidence," remarked ING economist Charlotte de Montpellier.

> "Finding a new prime minister who won't face a no-confidence motion will be extremely challenging, meaning France could remain without a government for weeks, if not months."

When questioned about the European Central Bank’s potential intervention in the case of intensified market turmoil, central bank president Christine Lagarde stated that financial stability is a key factor in maintaining price stability.

In a parliamentary hearing on Wednesday, Lagarde warned that eurozone economic growth might weaken in the coming months, with significant downside risks looming over the medium-term outlook.

Traders anticipate that the ECB will cut rates next week and are projecting 157 basis points of easing by the end of 2025.

In Asia, the South Korean won remained stable, as the finance ministry announced activation of 40 trillion won ($28.35 billion) in market stabilization funds following the turmoil caused by President Yoon Suk Yeol declaring and then retracting martial law.

South Korean lawmakers have proposed to impeach Yoon over the incident, which has shaken global markets. The won is near its two-year low against the dollar and is the poorest performing Asian currency this year, last quoted at 1,414.41 per dollar.

The yen gained slightly to 150.345 per dollar as traders speculate whether the Bank of Japan will raise interest rates later this month, with markets indicating a 60% chance of a hike in December.

In the U.S., investor confidence for a rate cut remained strong, even after comments from Federal Reserve Chair Jerome Powell and recent economic data indicating a slowdown in services sector activity in November following prior gains.

Powell indicated that the economy is performing better than the Fed expected in September when interest rate reductions began, hinting at support for a slower pace of future cuts.

Attention will be focused on Friday’s non-farm payrolls report for November, expected to show an increase of 200,000 jobs for the month, a rebound from October's meager rise of just 12,000, the lowest since December 2020, according to a Reuters survey.

Markets are now pricing in a 74% chance of a 25-basis-point rate cut by the Fed, compared to 67% the previous week, based on data from CME FedWatch.

The dollar index, which compares the U.S. currency against six others, was at 106.27. In other currencies, the Australian dollar was steady at $0.64241 after a decline of about 0.9% in the prior session due to weak data.

Sterling remained relatively unchanged at $1.2709.