Market subdued following expected Macron victory

9 May, 2017

Rob Bastin

Monday’s trading offered little change for Sterling exchange rates with a quiet economic calendar over the next couple of days. GBP/EUR opened just half a cent lower on Sunday night after it was announced that centrist Emmanuel Macron had stormed to victory in the French presidential elections with 66% of the votes against his far right opponent Marine Le Pen. With Macron’s victory very much expected, the Euro markets were somewhat subdued compared to 2 weeks ago when a 2 cent gap in pricing appeared after the first round. It now appears that the markets were already happy that his victory was more or less priced in at Friday’s trading levels and so the speculated volatility never actually materialised.

With no key announcements now until Thursday this week, it is very likely that rates will continue to consolidate in the coming day or 2, providing a calmer market for you to fix your exchange rates at attractive levels before the risks levels step up a notch. For buying US Dollars we are currently seeing the best rates in 7 months, and are only 1.5% away from peak buying rates on the Euro during the last year. Thursday is the big day for the UK this week with Industrial & Manufacturing figures in the morning, before the Bank of England rate meeting and Inflation report at lunch time.

Beyond this week the markets are likely to start switching their focus to the UK elections on June 8th and in particular the latest polls in the lead up to the event. UK polls are however notoriously unreliable, and so any fears of a hung parliament should Theresa May not get the desired number of seats for a majority win, would simply be catastrophic for the pound. Adversely any widening of her lead should be seen as positive for the pound although gains are likely to be limited with the pound sat just below key ceilings of resistance at 1.20 on the Euro and 1.30 on the US Dollar.

If you have an upcoming currency requirement and are not sure how best to navigate the upcoming events, contact your broker today for some friendly guidance and the options available to assist you with maximising and protecting your exchange rate.