Whilst the world of foreign exchange is almost impossible to predict, and we can never be certain of how markets will react I think it’s fair to say that if Marine Le Pen, the leader of Front National in France, wins next month’s French presidential election there’s a high possibility of Euro weakness. We can look to how the Pound reacted in the wake of the Brexit vote as guidance on this matter, as a quick look into Le Pen’s policies show a similarity with the direction the UK will be taking during the Brexit process. Although in many cases her policies appear far more extreme.
Le Pen plans to cut migration by 80% so that France can take back control of its borders and national identity. She has also demanded radical reform of the EU and threatened that a ‘Frexit’ will be next if she doesn’t get her way. She’s been supportive of US President Trumps travel ban and there has even been talk of France returning to the Franc as its legal tender as opposed to the Euro.
These are just a few of the policies contained within her 144-point manifesto. There are similarities with the successful ‘Leave’ campaign here in the UK when the Pound dropped so steeply, and I would expect to see the Euro drop sharply should Le Pen win in next month’s election. The first round will take place on the 23rd of April.
The Euro hit its lowest level against the Pound last month, after a French opinion poll suggested Le Pen was favourite to win the first round of elections. Whilst this is still the case the Euro has been boosted in the last week even if GBP/EUR doesn’t reflect this due to Sterling specific strength.
The Euro hit a 6-week high against the US Dollar yesterday with the rally being attributed to the strong performance of centrist candidate Macron in Mondays first televised presidential debate. I expect the polls to continue to weigh on the Euros value moving forward as we’ve seen with most key political elections over the past year. Do feel free to register your interest with me if you would like to be kept updated regarding short term price movements between the Euro and another currency.
Yesterday it was also announced that EU leaders will hold their first Brexit summit on the 29th of April, which is exactly 1 month after it would have begun. The meeting is expected to focus on their negotiating strategy and any major headlines surrounding this event could impact GBP/EUR.
I also think that those with an interest in the Euros value should pay attention to the markets at 3pm on Thursday, as this month’s consumer confidence figures will be released outlining sentiment within the Eurozone.
Feel free to get in touch if you wish to plan around this event or any others throughout the week, you can reach me at firstname.lastname@example.org or by calling 01494 725 353.
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