Daily Market Update

U.S. Dollar Stronger as Priced-In Win by Macron Calms Global Fears

May 08, 2017



The U.S. Dollar surged after an important weekend in which the European Union, moderate politics, and trade openness were all big winners. Following a shockingly rightist 2016 that witnessed the passing of Brexit and the scandalous campaign that led to Donald Trump’s presidency, the landslide victory by Emmanuel Macron of France has a surreal feeling to it, yet it comes with a sense of calm because pricing in his triumph was correct.

Things went according to plan and the methods of prediction achieved accuracy. Nevertheless, the greenback stands solid after a week of positive data and correction in the market after so much concern and speculation over France.

Today bring us nothing in terms of data. We foresee a quieter week, but recently we’ve had surprises. All eyes may now focus on Britain as the Bank of England prepares to meet on Thursday. Their take on policy in the midst of negotiations is likely to cause movement. Inflationary and consumption figures will round up the week.



The Euro is trading in similar ranges to last week, originally spiking by over a full cent once Macron was declared the winner of the presidential election. Emmanuel Macron is living every kid’s dream: His teacher is the love of his life and he indeed became president. The enigmatic former investment banker is new to running races, but his demeanor won the French voters, or at least more than the majority of those willing to cast a ballot. Overall, the turnout was not great and many voters chose “blank” as their option in protest of the two top candidates.

The country is certainly divided and serves as an example of disillusion in the European citizenry. It is worth noting that elections to the French National Assembly will be held on June 8th, when it will be imperative for Macron to form a coalition towards the center. The nationalists behind Le Pen may not have won, but they received twice the support they managed to get when Marine’s father ran for president in 2002. The anti-establishment feeling is strong and also growing. Macron will need to be an ambassador for pro-trade, promoting the values of cooperation and tolerance.



The Pound did not fluctuate wildly after the election in France. GBP will likely stay untouched until Thursday when the BOE meets. It is expected that Prime Minister Theresa May will consolidate power as earl elections in England have given the Conservatives an advantage already. Data-wise, the UK saw some terrible housing numbers as home prices had their first quarterly fall in five years. With threats of France competing to be the new banking hub over London, Sterling may be under pressure soon.

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