Euro hits 6-month high and Asian shares gain after French election

Investors relieved after centrist Emmanuel Macron wins French presidential election

An employee of a foreign exchange trading company works near monitors showing French president-elect Emmanuel Macron  on TV news. Photograph:   Reuters/Toru Hanai

An employee of a foreign exchange trading company works near monitors showing French president-elect Emmanuel Macron on TV news. Photograph: Reuters/Toru Hanai

 

The euro hit a six-month high against the dollar on Monday while Asian shares gained and US stock futures briefly touched a record high on investor relief after centrist Emmanuel Macron won the French presidential election.

The common currency gave up gains later, with some market participants citing uncertainties on whether his new party, rebranded La Republique En Marche, can get a parliamentary majority in elections in June.

“We expect the focus to shift to French legislative elections in June. These will be crucial for determining Macron’s ability to implement his economic programme, which includes labour market reforms that would make it easier for French businesses to hire and fire,” said analysts at BlackRock in a note.

Pollsters’ projections give Macron a win of around 65 per cent to nationalist, anti-EU rival Marine Le Pen’s 35 per cent – a gap wider than the 20 or so percentage points that pre-election surveys had suggested.

The centrist’s emphatic victory brought comfort to investors and European allies alike, who had been nervous about the risk of another populist upheaval following Britain’s vote to quit the EU and Donald Trump’s election as US president – neither of which had been predicted by pollsters or bookmakers.

The euro rose to as high as $1.1024, its highest in about six months, before stepping back to $1.0973, 0.2 per cent below late US levels last week. – Reuters