MUFG Research discusses the EUR outlook ahead of the first round of the French elections on Sunday.
"The first round of the French presidential election is on Sunday and up until this point the event has been a bit of a sideshow with little interest, certainly a lot less interest than in 2017 when fears over a Le Pen victory weighed on euro sentiment," MUFG notes.
"The euro is already suffering due to renewed policy divergence expectations between the Fed and the ECB and would certainly fall on any positive result for Le Pen. 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," MUFG adds.
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