Forex, also known as foreign exchange, is the largest financial market in the world. Trillions of dollars are exchanged every day between individuals, corporations, and governments. Currency trading in the Forex market is often seen as a lucrative investment opportunity, but it is also highly volatile and unpredictable. One of the factors that can impact the Forex market is political events, such as elections. The upcoming French presidential election is a prime example of this.
The French presidential election will take place on April 23, 2017. The election has been closely watched by investors, as it could have significant implications for the European Union and the global economy. There are four main candidates in the race: Marine Le Pen of the far-right National Front, Emmanuel Macron of the centrist En Marche! Party, Francois Fillon of the center-right Republicans, and Benoit Hamon of the center-left Socialist Party. Each candidate has their own economic and political platform that could impact the Forex market in different ways.
Investors in the Forex market should prepare for the French election by monitoring the polls and the news. Polls are a good indicator of which candidate is likely to win, and this can have a significant impact on the value of the euro. The euro could potentially rise if Macron or Fillon wins, as both candidates are seen as being pro-European Union. Conversely, the euro could fall if Le Pen or Hamon wins, as both candidates have expressed skepticism about the EU.
Investors should also be aware of the economic policies of each candidate. Macron and Fillon have both proposed economic reforms that could be beneficial to the French economy, such as reducing regulations and cutting taxes. Le Pen has proposed more protectionist measures, such as leaving the EU and imposing tariffs on imports. Hamon has proposed several progressive policies, such as reducing the workweek to 32 hours and implementing a universal basic income. Each of these policies could have different impacts on the Forex market, depending on how they are received by investors.
Another factor to consider is the possibility of a run-off election. If no candidate receives more than 50% of the vote in the first round of voting, the top two candidates will face each other in a run-off election on May 7. This could potentially create more uncertainty in the Forex market, as investors would have to wait several more weeks to find out who the next president of France will be.
Investors can prepare for the French election by diversifying their portfolios and hedging their bets. Diversification is important because it spreads out risk across different assets or currencies. Hedging involves taking a position in a currency that is likely to go up if the currency you currently hold goes down. For example, if an investor holds euros and expects the value of the euro to fall if Le Pen wins, they could take a position in the US dollar or the Japanese yen, both of which are likely to rise in value in that scenario.
In conclusion, the French presidential election is a major event that could impact the Forex market in significant ways. Investors should prepare by monitoring the polls and the news, being aware of each candidate’s economic policies, and diversifying their portfolios and hedging their bets. While there is no way to predict with certainty what will happen in the election or how the Forex market will react, being prepared and informed can help investors make more informed decisions about their investments.