The Euro dipped in Monday trading after Alain Juppe, the former Prime Minister of France, confirmed that he was not ready to run in the French presidential elections. FX investors believe that his confirmation could result in a victory for Marine Le Pen, the anti-EU candidate. On Friday, opinion polls had suggested that if Francois Fillon were to be replaced by Juppe, Juppe would likely be the first round winner which ultimately could have knocked Le Pen from contention. Analysts believe that the Euro’s fate is pegged to Le Pen at this point, and a Le Pen win would likely cause a Euro decline.
As reported at 10:25 am (GMT) in London, the EUR/USD was trading at $1.0592, down 0.25%, falling from $1.0621 ahead of the Juppe announcement. The EUR/GBP was just easing way from its opening price at 0.8642 Pence, a gain of 0.01%.
Dollar Drifts after Profit Taking
In the US, the Dollar is under some pressure, largely as a result of profit taking after last week’s affirmation by the Fed chief that a rate hike is in order for this month. What is worrying to traders is whether or not that rate hike would be accompanied by hawkish forward guidance. Traders had been betting on several rate hikes in 2017 but the Fed has continued to assert that rate hikes would only occur provided the Fed’s dual mandate of price stability and full employment were met.