GBP/EUR dips as Macron wins first round of the French election
Philip McHugh April 12th 2022 - 2 minute read
The euro firmed on Monday after Emmanuel Macron claimed victory in the first round of the French presidential election.
Meanwhile the pound is struggling to attract support this morning, with GBP/EUR flat at €1.1975 and GBP/USD subdued at $1.3008. GBP/CAD is muted at C$1.6449, while GBP/AUD and GBP/NZD retreat to AU$1.7510 and NZ$1.9041, respectively.
Looking ahead, will another surge in US inflation bolster Federal Reserve rate hike bets and strengthen the US dollar today?
What’s been happening?
The euro ticked higher yesterday as the first round of the French election saw Emmanuel Macron beat his far-right rival Marine Le Pen.
The result was welcomed by EUR investors, most of whom are worried by Le Pen and her past anti-EU rhetoric.
The pound, meanwhile, got off to a weak start this week after the UK’s latest GDP figures printed below expectations, with the economy growing only 0.1% in February’s versus the 0.3% expansion forecast.
At the same time, the US dollar was supported by a modest rise in US Treasury yields, on the expectation the Federal Reserve will raise interest rates aggressively at its next policy meeting.
What’s coming up?
The start of today’s European trading session saw the release of the UK’s latest jobs report.
February’s figures reported unemployment fell to 3.8%, while the accompanying average earning figures revealed wage growth accelerated to 5.4% over the same period.
The bump in wage growth could offer some support to the pound today as it may help to cushion concerns over the UK’s cost of living crisis.
Also coming up this morning is Germany’s ZEW economic sentiment index, which could pressure the euro amidst forecasts sentiment in the Eurozone’s largest economy will have deteriorated again this month.
The most high-impact release of the day however will be the US consumer price index. Analysts are predicting another sharp surge in US inflation in March. Will this bolster Fed rate hike bets and strengthen the US dollar in the process?
Written by
Philip McHugh