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Euro could slide 10 percent on Le Pen victory - JPMorgan
February 6, 2017 / 3:27 PM / 10 months ago

Euro could slide 10 percent on Le Pen victory - JPMorgan

LONDON (Reuters) - The euro could fall swiftly below parity with the dollar and France’s borrowing costs soar to 2 percent more than their German equivalents if far-right leader Marine Le Pen won the French presidency in May, according to U.S. bank JPMorgan.

FILE PHOTO: The German Bundesbank presents the new 50 euro banknote at its headquarters in Frankfurt, Germany, July 13, 2016. REUTERS/Ralph Orlowski/File Photo

In a note to clients dated Friday but sent to media on Monday, analysts from the bank discussed various scenarios after a Le Pen victory in April and May.

“Euro and oil have decent downside on a Le Pen victory: euro could fall about 10 cents to about $0.98 over a few weeks and oil could decline by 5-10 percent,” the note said.

“In the remote scenario of a Le Pen Presidency with supportive government and parliament, 10-year Bunds could approach 0 basis points and 10-year France-Germany (yield spread) 200 basis points.”

Reporting by John Geddie and Patrick Graham, editing by Nigel Stephenson

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