Today, the euro hits a 3-week high ahead of the first round of the French presidential election. According to preliminary estimates, centrist Emmanuel Macron leads the race. However, it is too early to make any forecasts, as Marine Le Pen and Jean-Luc Melenchon that advocate for Frace's withdrawal from the EU also have a good chance. The first round of the election that will be held on Monday puts upward pressure on the European currency. The EUR/USD pair is trading at 1.0762. The euro extended gains yesterday after the release of upbeat data on the EU inflation rate. Today the market situation is slightly changed. Germany's producer prices growth slowed in March. According to the government data, the Producer Price Index remained unchanged in March after a 0.2% increase in February.
Economists had forecast a 0.1% rise. On a yearly basis, Germany's producer prices rose by 3.1%, which was almost in line with an increase of 3.2% expected by economists. After the release of these data, market participants forecast a slowdown in consumer price growth. This indicates that there is no need to rise the ECB key interest rate in the nearest future. In addition, experts believe that officials of the ECB may decide to extend quantitative easing program until December 2017. To sum up, analysts expect the euro to grow in the long-term. However, end of political uncertainty in Europe will switch traders attention to the ECB interest rate hike, which will give support to the US dollar against the euro.