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XE Market Analysis: Macron Victory a Major Focus



French election results are in line with the polls as Emanuel Macron cruises to a comfortable win over Marine Le Pen. Record low numbers of voters turned out to the polls and shunned the recent populist theme. The focus now shifts to other upcoming elections in Germany and the United Kingdom. 


The US Dollar weakened to multiple month lows against both the Pound and Euro as risk appetite soared after the French election results were released. The Dollar traded above 1.1000 against the Euro and close to 1.3000 against the Pound for the first time in 2017.


The Sterling looks set to have a run at the key 1.3000 resistance level against the US Dollar. In the week ahead, the UK currency holds onto its recent gains off the back of strong economic indicators last week. One month away from the surprise general election, it looks like we are in for a significant increase in the conservative majority in parliament. A word of caution though as we still have Brexit negotiations to come in the months ahead. 


The Euro initially moved sharply higher as the much-anticipated victory of Emmanuel Macron was announced. The pro-Europe candidate took over 65% of the vote as the French population shunned the recent populist tide experienced in both the UK and US. This euphoria was short-lived as market participants shifted their focus to Italy where Sovereign debt remains exceptionally high as the financial sector struggles and Eurosceptic populism is on the rise. 


The Loonie continues to struggle as commodity prices remain under pressure regardless of attempts by the global organizations to prop them up. U.S. oil production levels were projected to reach record levels in 2017 causing concerns for those OPEC members colluding to cut production.


A significant drop in building permits in Australia has pushed the Aussie Dollar lower across the board. Seen as an indicator of future construction and infrastructure investment, building permits are closely watched as a sign of economic growth. 


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