Euro strengthens as polls show Macron ahead in French election race

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21 April 2017


The Euro touched its highest level in over three weeks against the US Dollar on Thursday after the latest opinion polls showed that En Marche! candidate Emmanuel Macron was ahead of the rest of the field ahead of the French Presidential Election on Sunday.

he latest opinion polls released by Opinionway and Harris Interactive both have Macron ahead of Marine Le Pen in the run up of Sunday’s vote. The Harris Interactive poll gave Macron a comfortable 25% to 22% advantage over Le Pen, the largest lead he has opened up since February.

Financial markets have reacted in a generally positive manner to the growing prospect of a Macron Presidency. The common currency has gained by over a percent and a half in the past week, while the CAC 40 index in France soared by almost two percent yesterday, comfortably making it the best performing major stock index in the world.

As we have been saying for a few weeks now, we think the real risk is posed by Unsubmissive France leader Jean-Luc Melenchon. In the possible, albeit unlikely, event of a Le Pen-Melenchon run-off vote, we would expect an immediate sharp depreciation in the Euro of up to 5% against the US Dollar on Sunday night. Regardless, we expect a volatile session of trading on late Sunday, early Monday as investors react to the result.

Major currencies in detail


The prospect of an earlier than expected election in the UK failed to inspire the Pound on Thursday, which remained fairly range bound during London trading.

Investors remain fairly sanguine about the prospect of an election this year, particularly considering the latest opinion poll from YouGov gave Theresa May’s Conservatives a comfortable 48% to 24% advantage over Labour. A landslide victory for the PM is likely on the cards, something that should only help, rather than hinder, the Prime Minister’s quest to get the best possible deal to Brexit negotiations.

Retail sales this morning were a disappointment, although the reaction in Sterling was fairly muted. Other than that today looks to be a fairly quiet end to the week in the UK in terms of economic news.


Growing expectation that more market friendly En Marche! candidate Emmanuel Macron will make it through to next month’s run-off vote helped lift the Euro by almost half a percent against the US Dollar yesterday.

The latest consumer confidence index also came in better than expected, adding to the generally impressive stream of economic news released out of the Eurozone of late. The monthly index from the European Commission increased to -3.6 from -5.0, its joint highest level since 2007.

The preliminary services and manufacturing PMIs from Markit also came in above expectations this morning. The composite index, which is a weighted representation of the two sectors, rose to 56.7 from 56.4.


The Dollar slipped to a near one month low against its major peers yesterday off the back of the broadly stronger Euro.

Jobless claims data was slightly disappointing on Thursday, reversing the recent trend that had seen claims fall to around their lowest level in four decades. Claims increased to 244,000 last week, marginally higher than the 242,000 consensus.

Federal Reserve member Kashkari, the only member of the FOMC who failed to vote for higher interest rates at the central bank’s latest meeting in March, will be speaking this afternoon. With investors currently fixated on political developments in the UK and France, economic news in the US could take a back seat today.