The French presidential election was watched around the world and especially Europe with bated breath. The outcome of the race would surely have a big impact on the region’s economy, social programs, and general stability. Now that Emmanuel Macron has been declared the winner, what will happen to the euro?
Investors, analysts, and travelers are paying attention to the market to see how things change. The exchange rate between the pound and dollar and the euro gets more attention as we move into summer travel season when many people set out on holiday to euro-spending countries. How will the euro fair with the new president?

Euro Up and Down During Campaign

Macron was long seen as the campaign’s frontrunner and, as the pro-business candidate with financial experience, a steadier choice for the euro. However, as his rival Marine Le Pen rose in prominence and in the polls, so did the uncertainty around the euro. Le Pen’s far-right campaign centered on keeping France isolated, limiting immigration, and leaving the EU, which lead to a weakened euro as the ideas were discussed throughout the country.
As the final election grew closer, analysts predicted that a Le Pen victory would  be a nightmare for financial markets far worse than Brexit or Donald Trump, due largely to the fact that France leaving the EU was pivotal to Le Pen’s campaign, and the move could throw the EU into complete crisis.
However, after Macron and Le Pen won the first round of voting and became the final two candidates, the euro rebounded and surged against the pound. Part of the surge in value is that the pound has struggled after Theresa May announced the upcoming snap election.
 

What Macron’s Win Means

Most experts predict that Macron’s victory will be a steady boost for the euro. Throughout the campaign, when Macron came out on top of debates, the euro spiked afterwards, leading many to predict that his presidential victory could lead to sustained growth. The euro rose to $1.1023 against the dollar within the first 30 minutes after projections of Macron’s victory on Sunday night—the first time the euro had been above $1.10 since Donald Trump’s victory for the U.S. presidency in November.

However, don’t expect the euro to grow too significantly. The markets had already priced in the status quo being maintained due to Macron’s predicted victory, which means the euro’s rise will likely be fairly small. Macron’s victory is good for the markets because it keeps things relatively stable and doesn’t bring too many questions for the future.
“While a Macron win had been largely priced in, the euro could see additional strength when markets open,” said Alexandra Russell-Oliver, currency analyst at Caxton FX. “Gains this time could be more modest, but markets will be relieved to see this election go as expected.”
Macron’s victory means that France will continue to trade throughout Europe and the world and that the border will remain generally unrestricted, both of which is good for the regional economy and the euro.
“Investors will likely welcome this result, as it eliminates uncertainty regarding France’s ongoing membership in the euro,” said economist Dean Turner. “However, since markets anticipated this result, they had largely positioned for this outcome, which may cap any gains in the short term.”
The effect of Macron’s victory could be relatively short lived, especially if he can’t gain the support he needs in June’s parliamentary election, which would make it difficult for him to push his plans through the government. In order to keep up the strength of the euro, he must now unify the country, gain support in the government, and turn his plans into action.
In the few days since the French election, the world has continued to watch the euro, and so far things seem to be moving in the right direction. Time will tell if Macron’s victory can maintain a strong euro.