Bank of France Governor Warns Voters About Frexit

Bank of France Governor Francois Villeroy de Galhau cautioned French voters about the costs of withdrawing from the euro, noting that local interest rates are already rising on concerns about this year’s presidential election.

National Front leader Marine Le Pen, who wants to take France out of the single European currency, is on track to place first in the initial round of voting in France’s 2017 election, though she is unlikely to win the run-off and attain office, polls show. Even so, with the National Front closer than ever to power, the premium the French government pays to borrow over Germany has increased to its highest level in more than four years.
“The recent increase in French rates — which I believe is temporary — corresponds to a certain worry about the exit from the euro,” Villeroy de Galhau said Monday on France Inter radio.

Le Pen has the support of about 26 percent of the electorate for the first round of voting in April, compared with 20.5 percent for independent Emmanuel Macron and 17.5 percent for Republican Francois Fillon, according to the latest Ifop daily rolling poll. Both Macron and Fillon would defeat Le Pen in the second round vote, all polls show.

via Bloomberg

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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