EUR: French elections in the spotlight - Nomura

In view of the analysts at Nomura, the market has turned its head towards the French elections, which has weighed upon the euro and other European currencies.

Key Quotes

“Global cross-market risk remains at benign levels, though fears would likely spill over to other markets if things continue to escalate – particularly broader European markets and currencies. Higher polling for Marine Le Pen justifies the markets’ recent fears, but our base case remains for her to lose the election. If fears escalate, we think 0.97 will be a key level in EUR/USD (-20% deviation from PPP), and the level the euro would settle around in the event of a Le Pen victory. If fears of a Le Pen victory subside, as we expect, then we see a very positive picture for the euro with the possibility of ECB tapering later in the year.”