Euro Steady After Marcon’s Victory in the French Election

After all the hype going into this weekend and the potential risk around the outcome of the French election, would you believe it but the polls got it right and Macron is the new president of France after a comfortable victory.

The markets opened in a relatively orderly fashion and we didn’t see the big gaps between Friday’s close and the Monday open that we experienced a couple of weeks ago. In fact we’ve seen a bit of a ‘buy the rumour sell the fact’ type situation so far as the Euro has now dropped back below closing levels having opened up initially better bid. Overall the Macron victory should be supportive for the Euro, as the alternative was definitely not. But the market will be considering how much was already priced in and of course in the fickle nature of the FX market we will move onto the next big event risk very quickly.

On Friday night we had a better than expected Non Farm Payroll result out of the US which the market took pretty much in it’s stride as downside revisions to previous data helped to dampen the impact. The dollar finished the session on it’s lows for the week, with the Dxy down under 98.50, but once again this was heavily assisted by the Eur buying going through on the expected Macron win – It has bounced to 98.80 this morning as the Euro has come back off.

Looking ahead to today and we will continue to see flow affected by the markets interpretation of the French election result. During the Asian session we have a few releases that will take focus away from the Euro, with Building Approvals and Business Confidence out of Australia due this morning as well as the Chinese Trade Balance numbers which are generally released around lunchtime here in Sydney.

It’s pretty quiet for the London and New York sessions today in terms of fundamental data releases, but traders will be continuing to monitor the headlines for any fresh news. The next big election will the the UK’s on June the 8th and that will start to dominate the markets focus as it gets closer, the Tories lead in the polls at the moment is as big as Macron’s was for the French election and this is helping keep the sterling bid.

Good Luck today and have a great week.

Rakuten Securities Australia Review