MUFG maintains a bearish bias on the euro in the short term

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  • “The EUR briefly bucked the broader USD strengthening trend overnight, with EUR/USD hitting an intraday high of 1.0851 following news that President Macron was set to win. the second round of the French elections. However, these initial gains were quickly reversed with the EUR/USD haven since falling back below the 1.0800 level. The price action likely reflects two factors: i) market participants n had not factored in a very negative political risk premium for the French election, and (ii) downside risks to growth in Europe from the ongoing conflict in Ukraine and further COVID-related disruptions, Europe is likely to continue even after the favorable result of the French elections”,
  • “The election results suggest the President is in a relatively strong position although he will likely need to form alliances with other parties. For the EUR, the favorable French election result is clearly not enough on its own to reverse the current downtrend”,


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