LONDON/May 7, 2017 (AP)(STL.News) — The euro is rising after Emmanuel Macron, a centrist would-be reformer and supporter of the European Union, won the French presidential election.
The currency shared by France and 18 other countries edged up 0.1 percent to 1.1013 in late Sunday trading in Europe. Stock markets weren’t open yet in Asia, though gains were expected. France’s CAC 40 index had risen last week to its highest since early 2008 — before the worst of the global financial crisis — in anticipation of the result.
While Macron’s win had been widely anticipated, the election had cast a long shadow over the continent as the defeated candidate, the far-right Marine Le Pen, had wanted France to exit the 28-nation EU, with potentially catastrophic consequences for the region and its euro currency.
“Europe dodges a bullet here,” said Paul Christopher, head global market strategist for Wells Fargo Investment Institute.
The rise in the euro is not as strong as it was after Macron’s victory in the first round of the presidential vote, as investors seem to have largely expected the outcome and polls showed him consistently in the lead by a wide margin going into the second round. But analysts say that the result lifts a huge amount of uncertainty for the European economy, which is just picking up some momentum after years of financial crises and stagnation.
“This is certainly positive for the European economy,” said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics.
The prospect of a Le Pen presidency had unnerved some after polls had failed to accurately read the popular sentiment that led to Britain’s vote last year to leave the EU and the election of President Donald Trump. Among Le Pen’s proposals was to have a referendum on EU and euro membership — and experts agree the euro wouldn’t have survived the departure of its founding member and second-biggest economy.
Macron has vowed to strengthen the EU and euro and to reform France’s economy, which hasn’t grown quickly enough in recent years to bring unemployment decisively below 10 percent. He will face a stern test in trying to do so as he will likely struggle to put together a majority in parliament for his year-old party in parliamentary elections next month.