EUR/USD has broken below 1.09. French Eurosceptic candidate Le Pen seems to be closing in on President Macron in the polls. This adds another threat to the euro, which will have to deal with the announcement of fresh sanctions against Russia today, economists at ING report.

Double threat to the euro

“A new round of sanctions against Russia are expected to be announced today by the US and the EU, with any implications for energy exports likely to keep the euro under pressure.”

“We suspect there is more room for France-related political risk premium to be priced into the EUR/USD as we head to this weekend’s first round. And indications from the first round votes that Le Pen might have the numbers to win in the second round would likely increase pressure on the euro next week.”

“When adding the potential negative spill-over from new sanctions against Russia, we see the risks to EUR/USD skewed towards the 1.0750/1.0800 area into the weekend. Any break below the 1.0817 early-March low may add fuel to the bearish run.”