France’s Marine Le Pen back in the presidential race as fiscal challenges loom large
The return of Marine Le Pen to the presidential race ahead of the 2027 election has injected significant uncertainty into France's political landscape, which could weigh on the euro. Per the full note from ing-think, her eligibility comes at a time when France is facing escalated fiscal challenges, potentially exacerbating tensions within the European Union. This situation arrives as market participants are navigating a consensus target for the EUR/USD to reach 1.20 by December 2026, with estimates showing a range from 1.12 to 1.26. With no immediate high-impact events on the calendar, traders should brace for volatility stemming from Le Pen's decision regarding her candidacy and its implications on fiscal policy.
What the desk is arguing
The desk believes that the political uncertainty surrounding Marine Le Pen's potential candidacy may serve as a headwind for the euro. In light of France's deteriorating fiscal outlook, this development could challenge investor confidence, especially in light of upcoming European Central Bank monetary policy decisions.
As highlighted in the commentary, Le Pen's prior conviction and modification of her sentence have reopened her path to a presidential run, with her responsiveness to her legal obligations suggesting that her candidacy is still in flux. This kind of political instability tends to create risk aversion among currency traders, thereby impacting the euro's performance.
Where it sits in our coverage
Our current consensus target for the EUR/USD stands at 1.20 for December 2026, reflecting a range from 1.12 to 1.26. Notable per-firm targets include commerzbank at 1.22 and goldman at 1.25.
This view aligns closely with the broader consensus, while the desk’s outlook and targets suggest a move toward the upper bound of expected prices, particularly with the heightened uncertainty stemming from the political arena.
How other firms see it
A number of firms express a cautiously optimistic view on the euro, including citi and nomura aligning with the idea of potential EUR strength influenced by the ECB. Conversely, citi and uob exhibit a more conservative stance.
Additionally, the trajectory of the EUR/USD is intricately linked to sentiments surrounding the ECB's policies and economic health indicators within the Eurozone. Market participants should closely monitor these developments, as shifts in fiscal perspectives can impact broader currency dynamics.
What the calendar says
With no upcoming events scheduled that could significantly impact this situation, traders need to remain vigilant for any announcements from Marine Le Pen regarding her candidacy and any subsequent implications for fiscal policymaking in France. This political development could overshadow technical drivers in the immediate term.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Marine Le Pen's eligibility increases political uncertainty, impacting investor confidence in the euro.
- 02France's worsening fiscal outlook may challenge monetary policy and the euro's strength.
- 03EUR/USD targets range widely, with consensus around 1.20 by December 2026.
- 04Traders should monitor Le Pen's decision on candidacy and its implications.
Market implications
Watch for potential volatility in the EUR/USD as traders react to Marine Le Pen's candidacy announcement, especially if it includes hints about fiscal reforms or budgetary stances. The consensus target level of 1.20 will serve as a critical threshold for potential upward moves in the euro.
Risks to this view
A reversal in our call could occur if Marine Le Pen ultimately decides not to run or if there is a significant positive shift in France's fiscal outlook, potentially bolstering confidence in the euro. Additionally, any unexpected policy shifts from the ECB could invalidate the current trajectory for the EUR/USD pair.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 1.1140 |
ABN AMRO | Bullish | 1.1500 |
Bank of America | Bullish | 1.1500 |
Articles France’s Marine Le Pen back in the presidential race as fiscal challenges loom large 14:28 FX Rates France Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Marine Le Pen can now run for president in 2027, setting the stage for a highly uncertain campaign against the backdrop of France’s worsening fiscal outlook Charlotte de Montpellier , Benjamin Schroeder and Francesco Pesole RN parliamentary party leader Marine Le Pen leaves the Paris courthouse after hearing of the verdict in her appeal trial Le Pen can run for president, but will she? Marine Le Pen was convicted in March 2025 in a case concerning the misuse of European Parliament assistants by the former Front National. She was sentenced to four years in prison, including two years suspended, fined EUR 100,000, and barred from holding public office for five years with immediate effect.
This ruling has now been reviewed on appeal. The appeal court upheld her conviction today, but modified the sentence. She has been sentenced to three years in prison, including two years suspended, meaning that she will serve one year under electronic monitoring.
She has also been banned from holding public office for 45 months, of which 30 months are suspended. As the period of ineligibility began in March 2025, the first 15 months have elapsed. As a result, she is now officially eligible to run in the 2027 presidential election.
Nevertheless, it remains uncertain whether she will actually stand as a candidate. A few days ago, she indicated that her candidacy would depend on not being sentenced to electronic monitoring. She is expected to announce her decision this evening.
If she chooses not to run, Jordan Bardella is expected to become the presidential candidate for Rassemblement National (RN). Where does the campaign stand? The presidential campaign remains highly uncertain.
The number of potential candidates is still very large, reflecting the continued fragmentation of the French political system. French political history shows that opinion polls remain highly volatile nine months before a presidential election. Being the frontrunner at this stage does not guarantee victory.
Three leading candidates currently stand out on the centre-right and right: Édouard Philippe (Horizons), Gabriel Attal (Renaissance, the former party of Emmanuel Macron), and Bruno Retailleau (Les Républicains, representing the traditional conservative right). On the left, Jean-Luc Mélenchon has already announced his candidacy and remains the most visible figure of the radical left. Raphaël Glucksmann is regularly tested in polls as a social-democratic and pro-European candidate.
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