By EWN • 26 April 2022 • 9:59
The euro might be able to rise further against the pound thanks to news Emmanuel Macron has won the French presidential election.
Macron won against Marine Le Pen after he secured 58% of the vote according to figures by noon on Monday.
“The result of the French election is likely to bolster the euro after pro-EU incumbent Emmanuel Macron was able to claim victory,” says Philip McHugh, at Currencies Direct.
The pound fell against the euro last week according to data from Pound Sterling Live and the news that Macron has won in France could offer better rates for readers looking to buy sterling over coming days.
Many economists say Macron’s victory is important because of his stance towards the economy, he came to power on a ticket to reform the economy and his new mandate will mean he can finish the job.
Economists say this can only support the Euro Area’s second largest economy.
Gilles Moëc, Group Chief Economist at AXA Investment Managers, says he expects Emmanuel Macron to push even more strongly for a second phase of debt mutualization in the EU.
This would involve EU states coming together to sell debt in order to raise money.
Importantly, it raises the cost of borrowing for those traditionally strong and large European economies such as France and Germany, but it lowers it for other countries.
Economists do however see this as a positive as it can broaden economic growth and boost the overall Euro Area economy.
If Macron succeeds it can offer long term lasting gains for the euro.
The pound is meanwhile really struggling as investors fear a sharp slowdown in economic activity in the UK.
“The pound suffered a sharp sell-off on Friday morning, following the release of weaker-than-expected UK retail sales and PMI releases,” says Philip McHugh at Currencies Direct.
“A surprisingly large slump in sales growth proved particularly damaging for Sterling as it raised concerns the UK is heading for a period of weak consumer spending,” he also said.
The initiative therefore is very much with the euro as we approach the end of April and look forward to May.
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