Macron’s decisive victory over Front National leader Marine le Pen in Sunday’s second round of the French presidential election catapulted the euro to a six-month high against the dollar.
At the start of trading on Monday (8 May) the euro was up to $1.101 against the dollar, though it gradually eased back to $1.095 later on.
The euro’s gains against the pound were more modest as markets digested the news on Monday, initially opening up 0.14% higher at £0.849 before slipping back to £0.844.
The Euro Stoxx 50 index of European shares also saw a lull this morning after earlier hitting the 3,660-points mark and surpassing the previous close. By mid-morning, the index was back down to 3,642 points.
The fallback in Europe’s key blue-chip index did not come as much of a surprise to commentators who viewed Emmanuel Macron’s victory as already sufficiently priced in.
But following Marine Le Pen’s failure to secure the presidency, many investors have become even more bullish towards the region, arguing that now was the time to focus on improving fundamentals.
“In a context of positive but moderate worldwide growth, the eurozone is showing a positive dynamic linked to the fact that it is still in the middle of the growth cycle begun in 2013,” said SYZ Asset Management chief economist Adrien Pichoud.
“The deflationary fears are dissipating and this is fuelling a debate over a gradual phasing out of the ultra-accommodating monetary policies put in place by the ECB over the past few years.
“Under these circumstances, the coming months should witness significant movements on the financial markets, even though the immediate impact of the election of Macron is expected to be limited, given the extent to which the markets had already anticipated this outcome pursuant to the first round.”
