French President Emmanuel Macron is set to face off against Marine Le Pen in the second round of the French presidential election this Sunday. A Macron election victory should be stabilising for the euro, but the EUR/USD pair needs to settle above 1.10 to alleviate downside pressure, economists at Westpac report.

A win for Le Pen would be a huge shock

“A Macron victory should see National Assembly Election (should occur in May or June) result in another majority, or at least a workable minority, led by Macron’s La Republique en Marche.”

“A win for Le Pen would be a huge shock, blowing open National Assembly voting and undermining EUR, but is now highly unlikely after Wednesday’s leaders’ debate.”

“EUR needs to regain levels above 1.10 to reduce risk of a slide to retest 2020’s spiked lows in the 1.0650 area.”