The impact of the Dutch election on the value of the Euro?

Dutch Prime Minister Mark Rutte has won the most seats in the parliamentary election and has defeated the controversial Geert Wilders. His VVD Party has managed to secure victory and the turnout in voters has been the biggest in history. At the time of writing Mark Rutte’s party has won a total of 33 out of 150 seats which was 8 less than last time. However, with Wilders only winning 20 seats and with a turnout of 80% this was a clear victory and a rejection of populism.

A high turnout shows that Dutch people are clearly concerned with what happens to their future and it could be argued that this is a good thing rather than have Wilders’ far-Right party winning. This has yet to have too much of an effect on GBPEUR rates as it was unlikely in the run up to the election that Wilders was going to win.

In order to win a majority in Dutch parliament a total of 76 out is 150 seats is needed so watch how this unfolds as it is likely that a total of four parties will have to unite.

Now we have seen the news in the Netherlands the next election to be aware of will be the French election due to start on April 23rd. Marine Le Pen still maintains her position as one of the front runners and is likely to win the first round. However, the chance that she will end up winning the election is now extremely unlikely.

Indeed, with Rutte winning the election the more right winged parties have been silenced in the Netherlands and we could see Marine Le Pen lose some of her votes after last night’s election result.

Little change for Pound to Euro exchange rates

The Pound vs the Euro has lost a little ground since the confirmation of the result and now the focus will return back to what is happening with Eurozone economic data. At 10am this morning Eurozone inflation data is due to be released in the form of the Consumer Price Index.

With the European Central Bank having recently confirmed that they will be tapering their current QE programme of EUR80bn per month to EUR60bn per month today’s inflation data will confirm whether the ECB will be able to carry out their plans. Therefore, if this comes in line with expectation then I anticipate further Euro strength throughout today.

With Article 50 potentially less than 2 week away I think we could see further gains for the single currency vs Sterling so if you’re considering buying Euros in the short term it may be worth taking advantage of these current rates.

The French elections in April will be the main focus for Euro investors, and those with a Euro buying requirement may be presented with opportunities as we approach April. Stay in regular contact with your broker who can help you maximise on potential returns. Call our trading floor on 01494 725 353 or email me here if you are yet to register an account and have any questions.

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