French Election: Risk on rally in market after Macron victory

Many of the financial markets have not opened yet after the weakened; nevertheless, a risk rally is clear from the movement in the forex market. The euro has moved above 1.10 against the dollar and the yen weakened. At one point, the popular safe haven currency weakened to 113 per dollar and currently trading at 112.9 per dollar.

A risk rally is now expected in the markets all around the world. However, the rally may not be like the one seen after the round-one of the election as the result was somewhat expected. According to the latest count, with 92 percent reporting, the independent candidate and the leader of the ‘En Marche’ movement Emmanuel Macron has secured a victory over Front National candidate Marine Le pen by receiving 65.2 percent of all votes. The uncertainties surrounding round one of the election was much higher as the market participants were not ready to accept polls at their face values, especially after last year; Brexit and Trump victory. But after round one, it was clear that pollsters were correct in their prediction and that sealed the market expectations for the round two, where it was widely predicted that Le Pen would lose to Macron with more than 20 percent margin.

Today could remain volatile by additional risk buying by some participants while others book profit. It will not be a surprise to see the market in red by the end of the day.