The euro ended the week lower against the greenback. Politics will remain front and center for the euro as well as investors watch for fresh French election headlines. Two candidates (Bayou and Jadot) pulled out this past week and more could follow. Any decrease in the chance of Marine Le Pen becoming the next French President would be viewed as negative for the currency. Recent polls show Le Pen in the lead even in a race with scandal laden Filion not far behind. Le Pen’s popularity rose after riots over an alleged police rape spread across the suburbs of France. Her anti-government / terrorism / immigration / EU views are gaining traction but major news agencies are describing a victory by this far-right candidate as the next major political earthquake. It would usher a new wave of protectionism in the Eurozone’s second largest economy that could threaten the very fabric of the Eurozone community. The Eurozone economy on the other hand has been performing better with inflation on the rise, manufacturing and service sector activity picking up steam, leading to an improvement in German business confidence. With only German unemployment, retail sales and Eurozone consumer price reports scheduled for release, the euro will most likely take its cue from U.S. and/or European political headlines.
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