Eur Rises With Risk Appetite Returning After French Elections

The euro surged against the U.S. dollar and the yen sank on Monday on relief over Emmanuel Macron’s victory against anti-euro nationalist Marine Le Pen in the first round of France’s presidential elections.

The euro was last 1.2 percent higher against the dollar at $1.0855, not far from the 5-1/2-month high of $1.0935 it reached after the initial indications from the Sunday vote gave victory to Macron, as predicted by weeks of polling.

The same polls showed Macron defeating Le Pen by as much as 30 percentage points in two weeks’ time, suggesting players can buy back into the currency. The euro’s session high briefly put the currency up about 2 percent against the greenback.



Sunday’s outcome reduced the prospect of an anti-establishment shock on the scale of Britain’s vote last June to quit the European Union and the election of Donald Trump as U.S. president.

The euro’s dip from its session high likely indicated profit-taking rather than doubts about a Macron victory over Le Pen in the second round, said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.

“The news of Macron winning is now priced in,” he said. “The risks of a disintegration of the euro have been removed.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza