EUR/USD to fall on any positive result for Le Pen – MUFG.

French election is starting to get some attention as recent polling has very much indicated positive momentum for Marine Le Pen who has clearly closed the gap to Macron. A good result for Le Pen is set to weigh on euro sentiment, economists at MUFG Bank report.
Le Pen closing the gap to Macron
“Polling from Politico indicates a clear narrowing of the gap with Macron’s support dropping 3ppts to 27% while Le Pen’s support over the same period has picked up 3ppts to 21%. Other polls have shown a bigger improvement for Le Pen.”

“Over 60% of the electorate now do not view far-right candidates as a threat to French democracy. But a Le Pen victory would still be bad news for Europe and would still be classed as anti-Europe although those policies have also been softened.”

“A Macron victory remains probable but a margin of defeat for Le Pen on Sunday of less than 3ppts would create higher uncertainty through to the second round election on 24th April and weigh further on an already weak euro.”

EUR/USD jumps beyond 1.0900 as US dollar retreats ahead of Fed minutes.EUR/USD is extending its rebound towards 1.0950, as the US dollar retreats despite the risk-off mood and firmer Treasury yields. EU’s von der Leyen said new sanctions against Russia will not be the last. Germany’s Factory Orders disappointed in February. Fed minutes awaited.

GBP/USD recovers to 1.3100 amid damp mood, ahead of Fed minutes.GBP/USD is trading close to 1.3100, recovering ground amid a profit-taking decline in the US dollar ahead of the Fed minutes. BOE/Fed policy divergence, risk-aversion and the Russian sanctions could keep cable’s further upside elusive.

Gold finds buyers once again near $1,915, Fed minutes in focus.Gold price is treading modestly flat, reversing a dip to six-day lows of $1,915. The bright metal finds support from a broad retreat in the US dollar, which is seemingly a profit-taking decline ahead of the critical Fed March meeting minutes.

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