Currency News

Daily Exchange Rate Forecasts & Currency News

GBP to EUR Exchange Rate Slips on Rising Hopes for Macron Win in French Election

April 20, 2017 - Written by Frank Davies

The Pound to Euro exchange rate fell from its weekly highs on Wednesday evening and Thursday morning. While Sterling sentiment remains solid, the Euro has seen an increase in demand causing the pair to slip.

GBP/EUR began this week trending at the level of 1.1799. On Tuesday the pair gained over a cent and on Wednesday hit 1.1990 – its best level since after the Brexit vote last year. On Thursday GBP/EUR trended slightly lower, in the region of 1.1920.

A lack of fresh upside factors since Tuesday’s announcement of a UK general election has led to some investors selling the Pound from its multi-month highs in profit-taking.

This allowed the Euro to more easily push GBP/EUR down. The shared currency has also benefitted from solid polling numbers for pro-EU centrist Emmanuel Macron in the upcoming French Presidential election.

The first round of the French election will be held this coming Sunday and the campaign has become a four-horse race in recent weeks.

As well as Macron, anti-EU far-right candidate Marine Le Pen enjoys lasting popularity and is one of the candidates most likely to make it to the second round.

However, pro-EU centre-right Francois Fillon and Eurosceptic far-left Jean-Luc Melenchon both also have solid polling figures with analysts suggesting it’s much too soon to count them out of the running.

French Presidential election jitters have put significant pressure on the Euro this year, as a potential ‘Frexit’ is perceived as one of the biggest risks in the foreign exchange market.

As France is one of the Eurozone’s biggest economies, analysts argue that a ‘Frexit’ could have dire consequences to the future of the Euro currency itself.
In recent months, anxiety over a possible ‘Frexit’ has kept the Euro from capitalising on solid economic data or a more optimistic European Central Bank (ECB).

As a result it’s no surprise to investors that both rounds of the French election will have an extremely influential and direct impact on the foreign exchange market.

Friday’s European session will see the publication of influential UK and Eurozone ecostats that could influence the Pound to Euro exchange rate.

Britain’s retail sales data from March could indicate how badly UK consumers are being affected by rising inflation and slowing wage growth. Meanwhile, the Eurozone’s preliminary April PMIs from Markit will indicate how the bloc’s economy has performed lately.

However, after this week’s political news, the Pound to Euro exchange rate is likely to end the week well above its opening levels.

The Euro is particularly unlikely to recover on Friday as it is the last market day before the first round of the French Presidential election on Sunday.

Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.


TAGS: Daily Currency Updates Euro Pound Forecasts

Comments are currrently disabled