Currency news

Macron suffers 1st round defeat, far-right may not gain majority

Chief Market Strategist at Equals Money
-
3
min read
Publish date
01/07/24
    • GBP: GDP stronger
    • EUR: French election concerns
    • USD: Inflation eases


    Currency recap

    Friday’s session was another quiet one, with macro-economic data releases coming in largely in-line with forecasts. The $ eased from recent highs as the latest inflation readings confirmed the recent downward trajectory. Sterling was largely unchanged after UK Q1 GDP data came in stronger than originally forecast, as markets are more focused on Thursday’s upcoming election. The euro is higher this morning, after early indications from the first round of French election voting show Le Pen’s far-right party set to claim victory, garnering 34% of the vote, but will possibly not be able to gain enough seats to win an outright majority.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.17% 1.8991
    GBPCAD 0.09% 1.7309
    GBPCHF 0.22% 1.1385
    GBPDKK -0.27% 8.7759
    GBPEUR -0.28% 1.1768
    GBPJPY 0.24% 203.9200
    GBPNOK -0.18% 13.4780
    GBPNZD 0.01% 2.0758
    GBPSEK -0.19% 13.3755
    GBPUSD 0.01% 1.2663


    *Daily move - against
    G10 rates at 7:30am, 01.07.24

    ** Indicative rates - interbank rates at 7:30am, 01.07.24

    Key data points

    Currency Event Period Consensus Previous
    GBP UK Nationwide House Prices Jun MoM 0.00% 0.40%
    GBP Mortgage Approvals May 61,000 61,140
    GBP S&P Global Manufacturing PMI Final Jun 51.4 51.2
    EUR EU Manufacturing PMI Final Jun 45.60% 47.30%
    EUR German Inflation Jun YoY 2.30% 2.40%
    USD S&P Global Manufacturing PMI Final Jun 51.7 51.3
    USD ISM Manufacturing PMI Jun 49.00 48.70

    Upcoming speeches

    • ECB President Lagarde

    What we think

    Macro-economics have temporarily taken a back seat for now as elections in France, the UK, and the US are capturing the market’s attention. However, we expect that trend to take pause as this week sees the release of EU Inflation, minutes from the recent US FOMC meeting, and the US monthly employment report. Although we have seen the euro bounce this morning in early trade on hopes the far-right will not gain an outright majority, we do not expect Thursday’s UK election to be a significant market mover, assuming a landslide Labour majority, as markets perceive both major parties have a very similar fiscal policy.

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    About the author
    Lawrence Kaplin
    Profile
    Chief Market Strategist at Equals Money

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