Political turmoil on the other side of the English Channel may give the pound an improbable respite from its Brexit-induced weakness.
A presidential-race victory for France’s National Front leader Marine Le Pen, whose opposition to the euro is one of the hallmarks of her campaign, could throw into doubt the future of the both the currency bloc and European Union, and so boost sterling’s allure, according to fund managers.
While polls suggest Le Pen’s prospects of winning the second round are slim, investors aren’t ignoring the possibility, given 2016’s big market surprises such as Brexit and Donald Trump’s US election win.
“If we get a Le Pen outcome, that’s going to be a negative for financial stability overall and with that negative for growth,” said Mark Nash, the head of global bonds at Old Mutual Global Investors, which oversees about $37bn (£29bn). “What you would see in that situation is the UK looking better than the rest of Europe. You’d have the issue of the eurozone breaking up and therefore you’d have sterling becoming a safe-haven asset essentially.”