Make or Break for the Euro

The Euro closed higher last week against the major currencies ahead of one of the biggest political events of the year and the question is what now for the European currency?

Never has there been such controversy surrounding a French presidential election and with an array of candidates with such different policies, there may be some great opportunities to be had in the Euro and indeed all of the major currencies.

The latest opinion polls predict a close race with 4 candidates in close contention and it’s possible that any one of them could come out a winner on the day. Independent candidate Emmanuel Macron currently leads the pack with around 25 percent of the vote followed by Eurosceptic and, far-right National Front candidate Marine Le Pen with 21.5 percent. The other 2, conservative Francois Fillon and the left-wing Jean-Luc Melenchon are trailing with about 19 percent a piece.

As we get closer to polling day the Euro is likely to experience extreme volatility as more polls are released and the numbers change but here are some of our predictions depending on who goes through to the 2^nd round on May seventh as there certainly won’t be a clear winner in the first round,

If Macron and Fillon both make it through on Sunday, the Euro should remain supported as both of these candidates are basically Pro European, and the threat of France ditching the Euro or actually leaving the European union would be gone.

The worst-case scenario for the Euro bulls would be if Le Pen and Melenchon make it through to the second round and most analysts predict the Euro would tumble with some saying by as much as 10 percent like the British pound did after the UK voted to leave the EU (Brexit)

If any other combination of candidates comes through on the day then it’s all bets off and the Euro could go in either direction.

All in all, it is going to be an exciting days in the run up to the election with the first of the results coming in during the Asian trading session and that is when we expect the real volatility and fun to begin.

The review was prepared by FIBO Group analyst Andrew Masters.