The GBP/USD cross has been relatively subdued today, with markets instead focusing on the result of the yesterday French elections. For the best dollar exchange rates click here.
As you can see from the graph below the GBP/USD cross has spent the majority of today's session bouncing between $1.2780 and $1.2830.
GBP/USD graph
Although the pound has done very little, the euro has surged against the dollar since yesterday afternoon after Emmanuel Macron won the first round of votes, easing fears that Marine Le Pen will become the next President of France.
The euro touched on a five and a half month high against the dollar of $1.0938 last night, and although the euro has slipped slightly over the course of the day, the currency pair is still trading around 1.5% higher than on Friday afternoon.
EUR/USD graph
Markets now see Macron as the clear favourite for the second round of voting in two weeks' time, with some polls suggesting he will beat Le Pen by nearly 30%. Investors had been cautious about heading into the euro after the shock result of the UK referendum and Donald Trump's victory last year. However, with Macron holding such a big lead, it would appear markets are now prepared to start buying back into the euro.
With the first round out of voting out of way, it won't be long until attention turns back to the UK and the Brexit negotiations.
GBP/USD is still close to the highest levels we have seen since October, but once the official divorce talks get underway, we could easily see the pound come back under pressure.
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