Currency news

Political risk premium on EUR eases

Head of FX Analysis at Equals Money
-
3
min read
Publish date
18/06/24
    • Marine Le Pen's comments stem EUR weakness
    • US retail sales is the major data point today


    Yesterday's currency recap

    We saw a reversal of some of the moves on Friday with some risk appetite returning to the markets following comments made by Marine Le Pen in the morning. Le Pen suggested that her party would not attempt to push out President Macron should her National Rally party win in France’s election, suggesting that her party may well moderate and move closer to the centre of the political spectrum. USD weakened as a result and we saw GBP and EUR moderately higher across the board.

    Today's GBP rates

    Currency pair Daily move* Indicative rate**
    GBPAUD 0.31% 1.9226
    GBPCAD 0.36% 1.7450
    GBPCHF 0.20% 1.1314
    GBPDKK -0.10% 8.8305
    GBPEUR -0.10% 1.1837
    GBPJPY 0.32% 200.2700
    GBPNOK 0.20% 13.5741
    GBPNZD 0.44% 2.0745
    GBPSEK 0.30% 13.3463
    GBPUSD 0.05% 1.2695

    *Daily move - against G10 rates at 7:30am, 18.06.24

    ** Indicative rates - interbank rates at 7:30am, 18.06.24

    Key data points

    Currency Event Period Consensus Previous
    EUR CPI MoM May Final 0.20% 0.20%
    EUR CPI YoY May Final 2.60% 2.60%
    EUR Core CPI YoY May Final 2.90% 2.90%
    USD Retail Sales MoM May 0.30% 0.00%
    USD Retail Sales YoY May 0.40% -0.30%

    Upcoming speeches

    • EUR: ECB Vujcic, Cipollone, Guindos, Knot, Villeroy
    • USD: Fed Barkin, Collins, Logan, Kugler

    What we think

    US retail sales will be the main data point today as markets continue to gauge how the US economy is faring. Unless we see a soft number here we would expect the current trend of USD strength to continue.

    Yesterday's comments from Marine Le Pen have eased the political risk premium attached to the EUR, meaning that the recent bout of EUR weakness could fade in the short term.

    This week's main events remain tomorrow's UK CPI numbers at 7am and then the BoE meeting on Thursday.

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    About the author
    Thanim Islam
    Profile
    Head of FX Analysis at Equals Money

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