Despite UK retail figures coming in well under the predicted level on Friday morning, the pound still managed to finish the week trading around 1.5% higher against the euro, the first time the GBP/EUR cross has ended a week above €1.19 since 16th December.
The latest retail numbers did initially dent sterling’s value, however the GBP/EUR cross quickly rebounded, with the pound still benefitting from Theresa May’s surprise election announcement last Tuesday and investors treading carefully ahead of yesterday’s French election.
GBP/EUR graph before the French election
As Friday drew to a close the euro was edging lower across the board as markets prepared for the first round of France’s Presidential election. Although Friday’s polls suggested Emmanuel Macron was leading the race, it seemed investors were concerned about far-left candidate Marine Le Pen gaining momentum following another terrorist attack in Paris during the early hours of Friday morning.
However, last night’s election result has seen the euro strengthen across the board with the GBP/EUR cross falling two cents after the markets preferred candidate Macron finished ahead of Le Penn in the first round of voting.
With the euro strengthening the GBP/EUR cross fell from €1.1950 to €1.1757, while EUR/USD broke through the $1.08 barrier and is currently trading at €1.0845.
GBP/EUR graph after the French election
For the past few months the polls have shown Len Pen leading the way, but Sunday’s result now puts Macron as clear favourite ahead of the final vote it two weeks’ time.
Despite the fall for GBP/EUR it is not all doom and gloom. The pound is still trading around four cents higher than a month ago, and yesterday’s move only takes us back to the levels we witnessed before Theresa May’s election announcement last week.