Outside of the upcoming French elections, there remains a number of key issues inside the Eurozone that could weigh heavily on the single currency in the coming weeks and months.
A common topic within our daily market reports is the upcoming French election. Politics have played a key role in the value of currencies in recent times and this election looks likely to follow that trend. The Euro hit its lowest level against the Pound this year after a prominent French opinion poll placed Marine Le Pen as favourite back in February. The reason behind the Euros fall at this time can simple be put down to Le Pen’s Euroscepticism and plans to stop France from using the Euro.
Whilst it’s looking unlikely that Le Pen will emerge victorious, the thought alone is enough to soften the Euros value. Another candidate, this time on the opposite side of the political spectrum is now concerning investors due to his plans to have a referendum on the country’s membership of the EU.
France retaining access to the EU appears to be a subject that can affect the Euro despite the single currency being used by many different countries, which is understandable when we consider that France is the zones 2nd largest economy. Keep an eye on how this unfolds and bear in mind you can contact us if you wish to be kept updated regarding spikes between Pound and Euro exchange rate.
Much of the concerns surrounding the Eurozone tend to focus on the Greek debt crisis along with the French election later this month (23rd of April). Another perhaps longer term issue that’s surfacing surrounds Italy, the Eurozone’s 3rd largest economy. Two recent polls suggest the Italians aren’t happy with using the Euro, as one of these polls suggests they are poorer as a result, and the other suggests they’re falling behind their main trading partners within the area (Germany). A political party in Italy called the 5-Star movement, which plans to remove Italy from the single currency has been surging in recent months. Italy has been using the Euro for 15 years and although I don’t think this is an imminent issue, it could surface later down the line and the thought of key members leaving the EU tends to weigh on the Euros value.
Of the two topics covered above I think the French issue is most likely to be the biggest mover for Euro exchange rates. Feel free to register your interest in the Euros value over the next few weeks if you have a currency exchange you’re planning on making, so we can offer our input and keep you updated. Call us on 01494 725 353 to register your interest or alternatively, email me directly at email@example.com.
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