21/02/2017 - French Election Uncertainty Weighs in On Euro

EUR

The euro rode out signs of gains for far-right French presidential candidate Marine Le Pen on Monday, inching higher against the dollar and the yen in trade held in check by the absence of U.S. investors because of a holiday.

French bond yields -- the main measure of market concern over Le Pen's chances in April and May -- showed the biggest gap to German equivalents since 2012 after a poll showed the head-to-head gap to centrist favourite Emmanuel Macron closing.

News that Socialist Benoit Hamon and hard-left rival Jean-Luc Melanchon were discussing cooperation in their bid for the presidency weakened the euro, with investors believing such a tie-up could either backfire and propel anti-globalisation, anti-EU candidate Le Pen into the Elysee palace or succeed and land France with a far-left president pursuing deficit-boosting economic policies.

GBP

The pound rose against most major currencies on Monday, snapping a three-day fall versus the euro at the start of another week likely to be dominated by questions about how Britain will leave the EU and the impact of Brexit on the economy.

The upper house of parliament, known as the House of Lords, has begun debating the bill which will pave the way for the formal start of talks on how Britain will leave the European Union. Opposition and independent members of the Lords are seeking amendments to force the government to give more regular updates on the divorce talks and to secure guarantees for the rights of EU citizens living in Britain.

Today the head of the Bank of England and its chief economist will be questioned by a parliamentary committee, while on Wednesday the UK statistics office will publish a revised reading of fourth quarter GDP figures.

Key Announcements

10.00 – GBP – Inflation Report Hearings