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Foreign exchange market: The euro falls short in the face of the risks of a Le Pen-Mélenchon duel

17/06/2021
Categories: Economy/Forex

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The currency market is anticipating indecisive competition and is worried about a possible Le Pen - Mélenchon duel in the second round of the French presidential election. The euro fell against the dollar after the Fed's announcement, falling 1.08% to $1.1995

per euro.

As the deadline approaches, the euro, at $1.1950, will more closely follow the curve of polls and Emmanuel Macron's popularity. Much earlier than in 2017, the euro, at 1.1950 dollars, was worried about the result of the French presidential election and the risk of Emmanuel Macron losing. An extreme scenario would see Marine Le Pen and Jean-Luc Mélenchon clash in the

second round.

Euro volatility will increase. Investors have already begun to implement hedging strategies against the fall of the European currency and the rise in its volatility in April and May next year. Uncertainty about the euro would benefit the yen and the Swiss franc, safe haven currencies, as well as the

dollar.

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