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The month of May was marked by the French presidential elections which saw the pro-European candidate, Emmanuel Macron clinching a victory. The euro which was previously trading subdued posted sharp gains as political risks in the eurozone faded. The sentiment in the U.S. dollar took a hit. Investors are still clueless about President Trump’s plans for tax reforms and fiscal stimulus spending.
Despite repeated attempts on laying out the plans, there has been no progress on the issue. The OPEC meeting in May was also a highlight that stood out as the oil cartel along with some major non-OPEC producing countries announced a further extension to the oil production cuts. This will see the November OPEC meeting agreement to curb production being pushed to March 2018. Below is a snapshot of the best and worst performing currency pairs for the month of May 2017.
Monthly Forex Performance May 2017
The month ahead: June 2017
The month ahead will mark the final month of the second quarter and data over the month is likely to fuel expectations on economic growth among the economies for the quarter ending June. There also some key monetary policy decisions as well as political events that will keep the markets busy.
UK general elections (June 8th)
The UK elections are due on June 8th and with the election date fast approaching, the British pound was seen already experiencing some volatility. The currency was seen tracking the developments from the opinion polls. While earlier it was mostly taken for granted that Theresa May’s conservative party would win the polls, the Labor party was seen catching up. Traders are therefore open to the idea even of a hung parliament.
However, in the last week alone, new polls put the Tories in the lead, although the lead could change. This also puts to question whether Ms. May will be able to get as large a majority as she would have expected. The uncertainty no doubt is seen in the volatility of the currency pair. The election outcome will potentially set the ground on the way the Brexit negotiations with the EU will begin, following the UK triggering Article 50, earlier in March.
