Forex Weekly Forecast May 8-12

The euro touched 6-month high against the U.S. dollar on Friday, extending its considerable gains over the past two weeks ahead of this weekend’s final round of the French presidential election.

The result of the French presidential elections is likely to determine the mood of financial markets next week. Additionally, investors will keep a close eye on the UK rate decision and top-tier data from the US.

What will the second week of May bring?

Monday is important for Australian, as the country is set to release data on building approvals and business confidence. On the same day, the UK will produce industry data on house prices.

Tuesday brings Australia’s data on retail sales, and Canada’s report on building permits.
On Wednesday, May 10, China will release data on consumer and producer price inflation, and U.S. will release data on import prices.
Thursday will be a heavy data day for the UK, as the Bank of England’s will announce its interest rate decision and present its updated quarterly inflation report.
The Monetary Policy Committee is widely expected to keep the benchmark interest rate at the record-low of 0.25 percent.

The last word for the week belongs to U.S., as the country will reveal reports about consumer prices, retail sales, and consumer sentiment.

French election decides the fate of euro

The most recent polls look favorable for centrist Macron, with growing support above 60 percent. But after polls were wrong after Brexit and Trump election, investors are wary. The euro is set to plunge by an immediate 5 percent if Marine Le Pen becomes the next president of France.

Before markets closed Friday, the euro dropped against the pound. The pound has also been supported in recent days, by a multitude of data that points to a robust UK economy.

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