The euro is slipping ahead of the French elections

The euro is slipping ahead of the French elections on Sunday.

The currency is down by 0.2% at 1.0701 against the dollar as of 8:50 a.m. ET.

France will go to the polls Sunday for the first round of its presidential election. Four candidates — Emmanuel Macron, Marine Le Pen, Francois Fillon, and Jean-Luc Melenchon — are within percentage points of one another in the polls, but only two will advance to the run-off in May.

“The most market friendly French election result would likely be a Macron-Fillon run-off in the second round, assuming that it is unrealistic that any candidate garners more than 50% of the vote,” Marc Chandler, the global head of currency strategy, wrote.

“Many suggest that the euro could rally on a Macron-Le Pen second round, given the tradition of forging a united front against the National Front. Yet this would seem to be the least surprising result. Nearly every poll suggests that this is the most likely scenario. And as we have noted, investors are relatively calm.”

Separately, Markit’s composite figure for the eurozone came in at 56.7 in April, which was the highest score in over six years.

The month’s strong data was driven by a positive April for France, with businesses largely overlooking the uncertainty of the upcoming French election.

“By country, faster business activity growth in France — the strongest seen since May 2011 — was offset by a moderation in Germany, albeit with the pace of German expansion still running at one of the fastest seen over the past six years,” a release from Markit announcing the data said.

As for the rest of the world, here’s the scoreboard as of 8:58 a.m. ET:

  • The British pound is down by 0.2% at 1.2786 against the dollar. Earlier, data showed that retail sales fell by 1.8% month-over-month in March, and by 1.7% year-over-year.
  • The Russian ruble is weaker by 0.2% at 56.3245 per dollar, while Brent crude oil, the international benchmark, is up by 0.3% at $US53.11 per barrel.
  • The US dollar index is little changed at 99.91 ahead of Markit manufacturing PMI and Markit services PMI, which will be out at 9:45 a.m. ET.

See the latest EUR-USD movements here.

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