The euro hit a six-month high of $1.1024 against the U.S. dollar before retreating slightly, on the heels of centrist Emmanuel Macron’s resounding electoral victory. Though Macron was expected to defeat leftist Marine Le Pen by approximately 20 percentage points, final tallies indicate that he won about 65.5 percent of the vote, while Le Pen received only 34.5 percent. The euro also hit a one-year high against the yen, trading at 124.58, as well as hitting a five-month high against the Swiss franc, to trade at 1.08865.
Macron, a former economy minister, faces significant challenges in the coming months as he tries to pull France out of its steep economic decline. His plans can take motnhs, if not years, to show real results, and will require substantial political backing in order to be implemented. On Macron’s economic agenda are a change in the amounts that French citizens will receive as pensions as well as cuts in corporate taxes and an array of labor reforms.
Global markets reacted positively to Macron’s victory, with U.S. equity index futures heading higher after a record high close on Friday due to positive employment data, an indicator that the S&P may head into record territory on Monday’s open. U.S. employment data released on Friday showed that 211,000 jobs were created in April and that unemployment is at 4.4 percent, a near 10-year low.
Nevertheless, analysts believe that the French election will move the markets more than positive U.S. data in the coming trading sessions. MSCI’s broadest index of shares outside Japan was up 0.3 percent on Monday morning while Japan’s Nikkei 225 gained 1.7 percent. Hong Kong’s Hang Seng Index gained 0.35 as of 6:13 a.m. GMT on Monday, and analysts expect global markets to continue rallying into the European and American trading sessions.