With Marine Le Pen marginally ahead of Emmanuel Macron in the French election polls as it stands, the upcoming French presidential election race is too tight to call. To the surprise of many, it is becoming a four-way struggle and closer than most expects had thought.
And with no one candidate likely to win a decisive 50% majority in the first round on 23 April, this would mean a final run-off between the two strongest candidates on 7 May.
If you need to move money between sterling and Euros, it is worth monitoring the French election carefully to choose the right time to make your currency transfer, as the result is likely to affect exchange rates.
What could a Marine Le Pen win mean?
While Macron is committed to solidifying EU integration, were Le Pen to take power it would almost certainly put significant pressure on the Euro, as one of her Le Front National party’s banner policies is to leave the unified European currency.
She has also promised a referendum on European Union membership within six months of victory, which adds to the uncertainty that could threaten financial markets and exchange rates. Analysts at UBS suggested that the euro could fall by as much as 10% if Le Pen wins.
Is Frexit next?
Britain voted for Brexit, but were not members of the shared currency. A Le Pen victory, and the prospect of ‘Frexit’ and a second major player departing the EU, could rock the continent even moreso and seriously damage the single market.
German Finance Minister Wolfgang Schaeuble said: "I hope Le Pen does not become French president.”, adding “"We need a pro-European France.”
As the markets work out what to do next, the biggest speculation is that in the event she won, many would consider moving funds out of the Euro into a safer currency.
What if Le Pen doesn’t win?
Opinion polls these days don’t always tell the full story, but at present the likeliest scenario from many experts is that Le Pen will make it to the second round, before her opponent - most likely Macron - gains enough votes to defeat her from those already eliminated.
Of the three other candidates, only centrist Macron is a keen public advocate of closer European integration, while the outsiders Francois Fillon and Jean-Luc Melenchon have both been critical of the European Union and its policies.
What if Macron wins?
In recent months, when Macron has come out on top in debates the Euro has gained in strength, making it seem as though a triumph for him could lead to a boost for the currency.
A victory for Macron could affect Brexit talks, as he is likely to take a hard line with the UK in negotiations. He has described Britain as a ‘vassal state’ of the Trump-era US that will suffer for its choice to depart the European Union, which could affect pound-euro rates in the long term.
Nonetheless, the closeness of the first round could create a climate of uncertainty similar to that which hit the pound in June 2016, leading to a significant short-term impact on the Euro.
Currency transfers in Euros
For currency transfers involving selling euros, or property sales in euros, it may be wise to safeguard your investments by exchanging money before rather than after the French election, especially if Le Pen is faring well.
With elections to come in Germany soon, it is not hard to imagine that instability caused from the French elections could lead to further uncertainty this year for the Euro currency.
Even a slight fall in the euro - a few cents - could make the coming weeks the best time to exchange money from pounds to euro since the UK’s EU referendum in June 2016, according to many experts.
So for international money transfers such as sending money to friends or family, or buying property, perhaps it may be worth comparing your options sooner rather than later.
Get attractive exchange rates and your first transfer FREE when you send money abroad with The Telegraph Money Transfers.