French Elections Impact on Markets, Euro and Pound React to Data
US Dollar (USD):
The US Dollar, has stayed quite stable after mixed reactions to the release of the newest US Nonfarm Payrolls report, through which 206K new jobs were created against the forecast of 190K, though previous month’s numbers have been revised significantly lower from 272K to 218K.
Euro (EUR):
Additional pressure may fall on the euro, as traders are eyeing the release of the retail sales data in the Eurozone. The previous reading was unchanged, and that is forecast to rise slightly to 0.1% year-over-year for May. Any surprise either way may be bound to move the pair, as hopes that soon enough US interest rates will start moving lower drive EUR/USD higher .
British Pound (GBP):
The British pound dropped slightly following the Halifax House Prices data for June, which released a reading of -0.2%, against expectations for a rise of 0.2%. This drop came as a surprise and is indicative of weaker housing market conditions that are part of the recent pound volatility.
Japanese Yen:
The yen still holds in a weak sentiment against the USD, hovering around 160.0980. Market players be cautious of Japanese intervention if the yen weakens much more. Further moves of the yen are worth watching as the Japanese government has conducted interventions earlier to prop up its currency.
Canadian Dollar, CAD:
The Canadian dollar will be driven by the unemployment rate figures for June, due on Friday, which is expected to climb a bit to 6.3 percent from the previous 6.2 percent. A further increase in unemployment may weigh on the CAD, as this would strike at potential economic slowdowns and—consequently—the Bank of Canada’s monetary policy decisions.
French Elections:
France is currently in the midst of a crucial election period, which has significant implications for both domestic and European politics. The second round of the snap legislative elections, called by President Emmanuel Macron after a poor showing in the European Parliament elections, concluded on July 7.
The far-right National Rally (RN) led by Marine Le Pen has made significant gains, while Macron’s centrist coalition is expected to lose many of its seats. The left-wing alliance also performed well but is unlikely to secure a majority. The final outcomes are expected to influence market sentiment and investor confidence, particularly within the Eurozone (POLITICO) (XE).
Other Economic News
Global Market Sentiment:
The global market sentiment has been clouded by geopolitical tensions and mixed economic data, making it ever complex. Investors are on guard for cleaner signals from the central banks while waiting for more releases of economic indicators.
Commodity Prices:
Oil prices have started the month of July with gains, as expectations of summer demand in the northern hemisphere kicked in. Brent crude price trades around $77 per barrel. Gold prices were slightly higher, Supported by mixed sets of U.S. economic data and ongoing geopolitical uncertainties that refuse to dissipate .
Central Bank Policies:
Of the main factors driving currency movements, divergent monetary policy among major central banks has been one of them. From the Fed’s prospective interest rate hikes to a European Central Bank tightening and all the way to dovish positioning through the Bank of Japan.
The FX market action today will likely be dominated by a plethora of recent economic data releases on the calendar and some leading indicators due this week. The US dollar stays firm after mixed job data, with weaker-than-anticipated economic indicators weighing both on the euro and the pound. Intervention potential in the yen and CAD’s sensitivity to unemployment data set the stage for a complicated market today.
FX Market Overview
USD Performance:
The US dollar does not move much and remain nearly flat. It trades 1.08314 to the Euro and 0.781369 to the British Pound (XE). The USD resilience is set on a mix between economics data and cautious optimism about the US outlook.
EUR/USD:
Live Rate [exchange-rates_badge color=”#003E80EB” amount=”1″ base_currency=”EUR” flag_type=”rectangular” decimals=”4″ base_show=”on” code=”on” symbol=”on” after=”on” id=”1714229471″ currency_list=”USD”]
The Euro (EUR) has moved slightly around the USD, at 1.08314 (XE). Underlying supportive measures by the European Central Bank and mixed performances of the economies within the Eurozone countries are major factors impacting on the value of the Euro.
GBP/USD:
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The British Pound is trading at 1.28085 against the USD (XE). A strong economic record from the UK has failed to stimulate the performance of the Pound amid continued concerns about inflation and post-Brexit trade issues.
USD/JPY:
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The Japanese yen has slightly depreciated against the USD to 160.692 (XE). Japanese economic data remains poor, and the ultra-loose monetary policy by the Bank of Japan hurts further price appreciation of the Yen.
Other Currencies:
AUD/USD:
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The Australian dollar trades at 0.674500 against the USD (XE). A weak commodity market and decreasing growth prospects in China do matter.
USD/CAD
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The Canadian dollar changed to 1.36428 against the USD (XE), supported by steady oil prices and strong underlying economic fundamentals.