UBS maintained its long-term target for the exchange rate at 1.0500, following the French parliamentary elections. The bank noted the underperformance of the far-right National Rally (RN) and the strong performance of President Emmanuel Macron’s centrist party.
Despite the uncertainty surrounding the formation and composition of France’s new government, UBS stressed that an immediate conflict between France and the European Union appears to be off the table.
The election outcome appears to have reduced the likelihood of near-term volatility for the euro, which some currency market participants may have expected. The absence of a potential conflict with the EU after the French elections has dampened expectations for immediate turbulence in the euro.
UBS’s analysis shows that while the French parliamentary election results were not the worst-case scenario for the euro, they also did not particularly boost the currency’s prospects. The bank’s position indicates that, despite political developments, there are still underlying challenges that could impact EUR/USD rates.
The bank’s unchanged target reflects the view that the French election results have not significantly changed the euro’s trajectory against the dollar.
The 1.0500 forecast for the EUR/USD pair remains in place as UBS assesses the broader implications of the election results on the currency market.
This article was produced with the support of AI and reviewed by an editor. For more information see our General Terms and Conditions.
