As one of the strongest economic powers in the EU, France’s recent election outcome is sure to have a dramatic impact on global currency exchange. The euro itself has been on the decline for years, and whether the new appointment of Macron will reverse this trend or exacerbate it is currently up for debate. Much still relies on Macron himself, and the ultimate effect he will have on the world economy depends largely on upcoming political appointments, as well as his initial success in office.
The short term
The few days immediately after the election indicated a stronger EU economy under Macron. Even before his victory was officially announced, the euro rose to 1.1023. This marked the first increase since the day following Donald Trump’s election in November 2016. As of May 11th, the euro closed at just over 1.09.
While the initial jump immediately after the election appears to be temporary, with rates returning to their usual low shortly after, the surge may forecast a long-term rise. There is still much speculation about euro prices to be had, as Macron has yet to prove his effectiveness in office. The next major step expected to affect currency prices will be the appointment of his prime minister, parliamentary candidates, as well as other important positions.
Although the euro remains low, it may be wise to remember that it remains a full 20% to 25% up from where it was at its introduction at the beginning of 1999. Keeping this in mind, we can recognize that Macron’s victory will play a small but important role in the overall picture of the European and global economy.
From one perspective, the election results seem to have stemmed the tide of what some were calling a worldwide wave of right-wing nationalism. Having beaten the notably conservative Marine Le Pen, Macron espouses centrist politics but has been described as a social democrat. And while he has a history of being involved with his country’s socialist party for years, he is a strong advocate of the free market, which some speculate could lead to a more substantial boost to the Euro’s value.
The effect of the Macron win in France’s general election is still too small to feel on a global level. The pound still reels in the wake of Brexit, while the USD continues to fluctuate under the leadership of Trump. However as the new president-elect continues to appoint new members of the French government, France’s position in the global economy will begin to solidify. Supporters of Macron are optimistic that their candidate’s centrist politics will be a boon to global currency exchange.