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Euro plummets to 6 week lows as Le Pen's presidential bid looms: SocGen

President of French far-right Front National (FN) party Marine Le Pen delivers a speech during a major rally to launch her presidential programme.
Chesnot | Getty Images
President of French far-right Front National (FN) party Marine Le Pen delivers a speech during a major rally to launch her presidential programme.

The euro plummeted to six week lows against the dollar on Wednesday amidst rising concerns among investors surrounding the French general election.

Analysts from Societe Generale projected the single currency weakness would remain especially if Marine Le Pen, the leader of the anti-immigration and populist National Front, continued to lead in the polls.

"Political risk is beginning to the euro in earnest, reflected by the euro's trade-weighted value reaching the lowest levels since the U.S. presidential election," a team of analysts at Societe Generale said in a note.

The euro fell 0.4 percent against the dollar to hit $1.241 on Wednesday morning though has since pared some of its losses to trade 0.2 percent lower in afternoon trade.

Le Pen, has promised throughout her campaign to renegotiate the terms of France's membership of the European Union if elected president, though her chances of success ultimately appear restricted.

The National Front leader's most likely presidential rivals are the centrist candidate Emmanuel Macron or former Prime Minister Francois Fillon with both currently expected to defeat Le Pen in May's final round of voting.

Investors appear to be increasingly nervous ahead of the scheduled elections in the Netherlands, France and Germany after failing to foresee the outcomes of the U.K.'s Brexit vote and U.S. President Donald Trump's victory.

"So much uncertainty with 9 weeks to go until the first round of the (French) election means we will probably see nervousness persist, and undermine the Euro across the board," Societe Generale analysts concluded.

However, Macron's chances appeared to improve Wednesday when veteran centrist politician Francois Bayrou announced that, rather than run against the former minister, he was offering an alliance in the presidential campaign. News of the planned tie-up, details of which will be unveiled later Wednesday, pushed the euro higher and French bond yields lower.