How Marine Le Pen France election victory could smash Euro


The euro will tumble to a 15-year low if Marine Le Pen France election victory happens, with the immediate reaction in the currency as GBP after Brexit vote.

29 March, AtoZForex – Euro zone stocks could crash up to 25 percent and the euro could tumble 10 percent if Marine Le Pen wins the French presidential election. The shared currency would drop to $1 or below a day after a victory for the National Front leader with five of those calling for a decline below 95 U.S. cents. Marine Le Pen victory will cause a rapid decline because the anti-European Union candidate has threatened to call a referendum on the euro and re-denominate the nation’s debt.

Marine Le Pen France election victory

A decline to bit for the first time since 2002 would be a fall of more than 7 percent from the current level of about $1.08. Also, the move below 95 cents would represent a decline of approximately 12 percent. This move would mirror the reaction seen in the pound following the U.K.’s decision to leave the European Union. It reinforces an emerging trend of currencies taking the strain for political upheaval.

In a survey before the Brexit referendum last year, the majority of economists forecast a drop below $1.35 in the event of a decision to leave. a call that was borne out after the vote as the pound slumped more than 10 percent to a 31-year low of $1.3229.

Frederik Ducrozet, an economist at Banque Pictet & Cie in Geneva expects the euro to drop after Marine Le Pen victory and said: “The market reaction would be very negative since re-denomination risks have been priced in only to a very modest extent.”

Marine Le Pen vs. Emmanuel Macron

If Marine Le Pen wins the election, with some economists surveyed assigning 61 % probability that independent candidate Emmanuel Macron will become the next president, compared with just 20 percent for Le Pen. Macron gathering up to 26 percent of the vote in the first round of the election in April, with Le Pen’s support at 25 percent, according to a rolling daily poll by Ifop released Friday. The independent candidate would beat Le Pen in May’s second round by 61.5 percent to 38.5 percent, according to the poll.

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