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Euro gains respite from Macron’s French election leadership

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The euro appeared to be on a seven-day losing streak against the dollar on Monday as the single currency rallied after French leader Emmanuel Macron defeated far-right challenger Marine Le Pen in the first round of the country’s presidential election.

Investor worries about the future direction of the euro zone’s second largest economy weighed on the euro, adding to worries about the economic cost of the war in Ukraine.

Meanwhile, the dollar was propelled higher by rising US yields and expectations that the Federal Reserve will act quickly to curb inflation.

Macron will face Le Pen on April 24 in what is expected to be a hard-fought French presidential election.

Nonetheless, Macron’s first-round lead gave the euro some breathing space – it rose as much as three-quarters percent in Asian hours to $1.0955. It was last up $0.41.pc at $1.09150.

Currency analysts said competition remains on the razor’s edge, with a negative impact on the euro.

“President Macron’s narrower-than-expected victory will fuel fears that there is an external chance that Le Pen can become president,” analysts at MUFG said in a note.

“First round results and opinion polls pointing to a close second round result will weigh modestly on the euro in the coming weeks.”

The dollar index — which tracks the greenback against a basket of six peers — was broadly flat on the day and just below the 100 mark, hit last week for the first time in nearly two years.

As the dollar gained ground, the Japanese yen has faced one of the sharpest selling pressures, with investors seeing little reason to halt bets against the yen while the Bank of Japan keeps yields close to zero.

The yen fell to a seven-year low against the dollar on the day of 125.435 yen per dollar. It was last down three quarters of a percent to 125.19.

“There is nothing to deter people from dollar/yen positions,” said National Australia Bank foreign exchange chief Ray Attrill. “So on and up for dollar/yen.”

The dollar gained as much as 0.5 percent against the Australian and New Zealand dollars on the day before paring gains.

Sterling was largely unchanged against the dollar at $1.30290.

The Russian ruble weakened in jittery trading on Monday, reversing some of the previous week’s gains after the central bank decided to ease temporary capital controls.

https://www.independent.ie/business/world/euro-gains-respite-from-macrons-french-election-lead-41541144.html Euro gains respite from Macron’s French election leadership

Fry Electronics Team

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