How do markets treat political risk?

In a period of potential (ok, likely) political change in the UK and France, Brian Daingerfield and Paul Robson ask how currency markets account for risks around election time. Whereas a Labour victory appears priced into the level of sterling, can the same be said of France's effects on the euro? In the US, of course, all eyes are on the upcoming Presidential election, and what sentiment over Donald Trump and Joe Biden's fitness for office may mean for the dollar.Remember to hit ‘subscribe’ or ‘follow’ so you can watch or listen to the latest episode of Bondcast as soon as they’re available.This episode was recorded on 3 July 2024. For any terms used please refer to our glossary: https://www.natwest.com/corporates/insights/markets/glossary.html Please view our full disclaimer here: https://www.natwest.com/corporates/disclaimer.html