After suffering a loss with the sudden boost of Marine Le Pen after former French Prime Minister Alain Juppe confirmed that he is not posed to run for France’s presidential elections, the euro continues to shed off losses despite a good open where it was back to business trading up again.
Marine Le Pen is an anti-European union candidate heading the National Front (FN), a political party in France. She is the daughter of Jean-Marie Le Pen who was also a former president of the party.
Last Friday, a survey conducted revealed that if Juppe is to run for presidency, replacing Francois Fillon who currently is involved in a scandal, and represent the center-right party, would most probably win the preliminary round of election. The poll also revealed that Emmanuel Macron, the centrist candidate, would come in second, knocking out Le Pen from the run.
Despite the data shown by the survey, investors still exercise caution and do not totally rule out the possibility of a surprise win for far-right Le Pen.
The news sent the euro to dive 0.32 percent, closing at 1.058. Currently the currency is dipping further at 1.0568, as of the moment of writing. As can be seen in the chart below, the currency’s current 14-day RSI is seen dipping away the mid-level at 46.33. Using the Bollinger Band indicator, the upper band level, which can indicate a buy signal, is situated at 1.068 while the lower band indicating sell is at 1.0503. Current trading is touching the middle band which lies at 1.0594, but a resistance is not yet likely to happen. A squeeze may occur for the next trading sessions if the currency doesn’t continue its downward movement to the lower band.
The French Election Drama
Despite the fact that he is facing accusations of misusing public funds, party leaders have backed Francois Fillon. Contenders were not successful in their efforts to convince the center-right candidate to resign from his post and an alternative candidate is hard to agree upon.
Elections in France, Germany, and the Netherlands for this year induced unease and anxiety within the market and has put the euro in constraints, according to analysts, even though Euro zone’s economic indicators continue to see a positive turn.
"The election drama, as long as that continues it will continue to drive (the euro), to keep it subdued," Washington’s Tempus Inc. Currency Strategist Juan Perez said. "So instead of going to $1.07 because of good economic numbers, it stays between $1.05 and $1.06 because of that drama going on behind it."
Sentix Investor Confidence Index Hits 10-Year High—Almost
A highly optimistic investor sentiment is currently seen in the euro zone, despite political drama within its members, sending the Frankfurt-based Sentix Investor Confidence Index to its—almost—10-year high on Monday, which is way more than the improvement the market is expecting to see in March. It seems that worldwide political concerns have very little effect on investor sentiments lately.
The index which measures investor outlook in the 19-nation region was up 20.7 points, the record level cap not seen since August 2007, which surpassed analysts’ expectations of 18.5.
This was a huge jump after it dipped to 17.4 from 18.2 in January as worries over US President Trump’s policies weighing down the global economy heightened.
"All the expectation components for the global economic regions rose and cast the decline of last month in a new light," said a statement released by Sentix. "Therefore the potential threat of a sudden halt to the economic recovery is off the table."
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