Euro strengthens as ‘pro-business’ Macron wins French presidency

The euro has risen after pro-EU Emmanuel Macron won France’s presidential vote by a large margin.

The single currency strengthened 0.2% against the dollar as investors were reassured over the future stability of the European project.

The reaction was muted, however, as investors were expecting Mr Macron, a former investment banker and an economic liberal, to prevail.

He has proposed cutting corporation tax and changes to the labour market.

“Voters elected for Emmanuel Macron’s pro-business policy proposals, which have the potential to unlock long-held-back investment and stimulate French markets,” said Stephen Mitchell at London-based fund manager, Jupiter Asset Management.

His opponent in the race for the presidency, Marine Le Pen, is a critic of globalisation and had proposed withdrawing France from the single currency.

In contrast, Mr Macron, has campaigned for greater European integration.

Mr Macron, who was economy minister under Socialist President Francois Hollande, has tried to define himself as neither left nor right politically.

He has proposed a range of policies combining budget cuts and more labour market flexibility, with public investment and an extension of the welfare state.

However, his relative lack of political experience, and parliamentary elections in June, mean scope remains for market uncertainty.

“I see significant risks of an inexperienced politician and technocrat not being able to execute properly well-intended policies,” said Stephen Jen, chief executive of Eurizon SLJ Capital, which is also London-based.

“We will see. It is important to give president Macron the benefit of the doubt.”