The world is currently focused on France where voters are heading to the polls Sunday to choose their next president. Ahead of
France is the second-largest economy in the euro zone and one of the seven biggest across the world. Its president holds enough powers to influence the country's economic and political path.
Furthermore, this election takes place at a time when the French people are increasingly concerned
"As two candidates to the French presidential election expressed their desire to work on a 'Frexit' once elected, these elections have of course implications beyond French borders," Vincent Juvyns, global market strategist at JPMorgan Asset Management, told CNBC via email.
"Though the legislative hurdles to get to a 'Frexit' are high, one can at this stage not say that it is impossible. In such a situation, the European project would definitely be at risk, the volatility would increase on financial markets and we could get in a situation at least similar to the European debt crisis of 2012," he added.
For the first time in 15 years, the far right has realistic chances of getting into power. This is also the first time in modern France when the incumbent president hasn't run for a second term.
There are 11 candidates running, of which four make up the list of frontrunners. A poll released by
All polls have shown that this election is too close to call.
Polling stations are due to close between 7 p.m. Paris time (8 p.m. for the big cities) on Sunday. Preliminary results are expected around 9 p.m. Paris time, slightly later than usual as the close race is expected to complicate and delay the results. In recent history, France has never had a race that was too close to call, with the two leading candidates usually being pretty clear.
"This is a
With the run-off schedule for May 7, it is expected that a new president will be formally confirmed
He added that the formation of the next government will depend on who's elected. "In the case of Francois Fillon or Emmanuel Macron, they
"We think it will probably need both Le Pen and Melenchon to get through to the second round to do the euro any significant harm," United Overseas Bank said in a note on Friday morning.
The worst case for markets would be if the far right and the far left made it to the second round and UOB believes there's only about a 25 percent chance for such a scenario. However, the analysts said it would mean a much lower EUR/USD,
If polls prove to be right and Macron and Le Pen make it to the run-off, "EUR/USD could retest the 1.09-figure, though we don't see the pair trading significantly higher," the bank said.