MUFG Research discusses the outlook for the euro ahead of the first round of French elections on Sunday.
“The first round of the French presidential election will take place on Sunday
and so far the event has been a bit of a sideshow with little interest, certainly far less interest than in 2017 when fears of a Le Pen victory weighed on sentiment euro,” notes the MUFG.
“The euro is already suffering due to renewed expectations of policy divergence between the Fed and the ECB and would certainly fall in the event of a positive result for Le Pen. A victory for Macron remains likely but a margin of defeat for Le Pen on Sunday of less than 3ppts would create greater uncertainty until the second round of elections on April 24 and further weigh on an already weak euro,” adds MUFG.
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