With less than a week to go before Macron or Le Pen secure the French election, how will the Euro fair as we approach the finish line?

A week to go in the French Elections

With just less than a week to go before the second and final round of the French elections the polls are showing a difference of 20% in favour of Emmanuel Macron. The Far Right presidential candidate Marine Le Pen has suggested that Macron is too much in favour of the European Union at the expense of the French public. Over the weekend we have seen clashes between police and protestors in Paris. The march was organised by three trade unions.

Eurozone Economic Recovery in Question

Marine Le Pen has spoken out in favour of leaving the European Union and has promised a referendum on France’s membership.

Support has been gained in rural parts of France as well as run down industrial areas that feel left behind in recent years by the current establishment. Le Pen has also promised to take control of the French borders as well as cut immigration. However, as shown by the UK in our own Brexit vote the control of immigration will be extremely difficult.

There is clearly a feeling of anti EU and anti-establishment in France so Macron has said although the EU is still ‘extremely important for French people’ it does need to change. He went on to say that the ‘dysfunction of the EU is no more sustainable.’

However, we saw what happened to David Cameron last year when he gave the public the Brexit vote last June and he very quickly disappeared from power. Perhaps it could be said that by Macron recognising a need for change rather than a total removal this could be a good thing for the country.

In terms of the impact for Euro exchange rates I think we could see a weakening of the single currency during the course of the week vs both the US Dollar and Sterling as the uncertainty as to which candidate could win is likely to cause some problems for the Euro.

Indeed, if the unlikely victor is Marine Le Pen I think we could see a dramatic weakening of the Euro as she has already spoken out about having her own Frexit vote and we all know what happened to the value of the Pound on the day of the vote.

Therefore, if you’re considering selling Euros at the moment and don’t want to run the risk as to what may happen to the Euro if Le Pen does surprise the market and win then it may be worth organising this during the course of this week. If you are in the process of selling a property in Europe and don’t have the funds available but would like to fix an exchange rate then speak to your account manager about how a forward contract could work for your individual needs. If you take an example of a 5% movement in the wrong direction this could be as such as £9,000 on a currency transfer of EUR200,000.

Eurozone GDP for the first quarter of 2016 is released tomorrow and with the expectation of 1.7% year on year if the data come out lower than expected we could see a negative move in the value of the Euro vs Sterling.

If you have a currency transfer to perform, detailing your requirements ahead of the French election result will allow us to formalise a plan for you in the event of any market surprises. Call our trading floor on 01494 725 353 or email me here and Ill be happy to assist you.


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