The euro rallied to USD 1.1023 from USD 1.0998 in early Asia-Pacific forex trading today after pro-European centrist Emmanuel Macron won the French presidency, scoring a resounding victory over far-right rival Marine Le Pen.
The single currency reached its highest level since November on Macron’s win, but the gains were modest compared to the reaction following his first round victory last month with markets largely pricing in Le Pen’s defeat.
However, the 39-year-old former investment banker’s victory effectively eliminates any risk of France leaving the single currency bloc. “It’s being interpreted as positive for risk sentiment as well as positive for the eurozone,” Imre Speizer, senior markets strategist at Westpac NZ told AFP. “I think what the Europeans have said in that corner of Europe is a resounding ‘No’ to populism.”
Initial estimates showed Macron winning between 65 per cent and 66.1 per cent of the ballots — a higher than expected score – and Le Pen scoring between 33.9 per cent and 35 per cent.
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Unknown three years ago, Macron is now poised to become one of Europe’s most powerful leaders, bringing with him a hugely ambitious agenda of political and economic reform for France and the European Union. But many analysts are sceptical about Macron’s ability to win a parliamentary majority, meaning he might have to form a coalition of lawmakers committed to his agenda.
Furthermore, his economic agenda, particularly plans to weaken labour regulations to fight stubbornly high unemployment, are likely to face fierce resistance from trade unions and his leftist opponents. He also inherits a country which is still under a state of emergency following a string of Islamist-inspired attacks since 2015 that have killed more than 230 people.
Le Pen, 48, had portrayed the ballot as a contest between Macron and the “globalists” — in favour of open trade, immigration and shared sovereignty — and her “patriotic” vision of strong borders and national identities.