It’s not the first time a Le Pen has made an attempt to secure the Presidential race. In 2002, her father Jean Marie Le Pen made headlines after making it through to the second round before losing to Jacques Chirac with only 17.79% of the vote.
So why are markets nervous this time round? Unlike her father, Marine Le Pen has taken a much softer approach to many of her father’s radical beliefs and her success comes at a time when many are beginning to question the validity of the European Union and its hold on individual member states. France has fallen victim to a number of terrorist attacks in the last decade which has spurred further notion for independence and complete control of French borders.
Her promise to hold a Referendum on EU membership is the main reason why markets are spooked. The union already faces a crisis as it prepares to lose its third largest contributor – the UK, to lose its second largest contributor could spell the end of the European Union.
No one is ruling out her victory, to do so in the wake of Brexit and Trump would be a mistake given the countless polls that ruled out these outcomes.
In the event that Le Pen was to emerge the winner of the French elections, I would expect to see a significant Euro sell off as markets prepare for a potential Frexit. Le Pen has promised to hold a Referendum on EU member within 6 months which creates further angst among Euro investors. If you are buying or selling the Euro in the coming weeks, there are a number of options available to you.
You only have to cast your eyes back to the UK’s Referendum last June to understand how markets react to political uncertainty.
The Pound fell over 20% against the Euro and US Dollar amid concerns that Brexit would have serious implications for the UK economy. Furthermore, the unexpected win for Leave defied almost every single poll and in similar fashion, Le Pen could once again defy all odds.
If you are in the process of buying or selling an overseas property, or have a requirement involving the Euro, you may benefit from one of the contract options offered here at Foreign Currency Direct.
A forward contract is one such example, which allows you to lock in a rate of exchange well in advance of the results of the French elections. In the event that Le Pen wins, you have peace of mind knowing that you have not fallen victim to a weaker Euro selling position.
If you’re looking to buy a foreign property or have a requirement for buying Euros, you can make use of a limit order which allows us to buy your funds once your target exchange rate is reached. That way, if Le Pen does win the French elections you can make use of the better rate of exchange.
Speak to a member of our team today on 01494 725 353 if you’d like to discuss a currency transfer and would like to learn more about these different contract options. Our friendly team are here to help and could save you thousands on your next transfer. Alternatively, you can contact me directly at email@example.com.
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