Euro Could Drop 10% on Le Pen French Victory

The euro could fall swiftly below parity with the dollar and France’s borrowing costs soar to 2 percent more than their German equivalents if far-right leader Marine Le Pen won the French presidency in May, according to U.S. bank JPMorgan.

In a note to clients dated Friday but sent to media on Monday, analysts from the bank discussed various scenarios after a Le Pen victory in April and May.

“Euro and oil have decent downside on a Le Pen victory: euro could fall about 10 cents to about $0.98 over a few weeks and oil could decline by 5-10 percent,” the note said.

“In the remote scenario of a Le Pen Presidency with supportive government and parliament, 10-year Bunds could approach 0 basis points and 10-year France-Germany (yield spread) 200 basis points.”

via Kitco

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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