Euro stabilizes as Macron leads in first round of French elections

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

Investor worries about the future direction of the eurozone’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.

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

Nonetheless, Macron’s first-round lead gave the euro some breathing space – it rose as much as three-quarters of a percent in Asian hours to $1.0955. It was last up 0.4 percent at $1.09150.

Currency analysts said competition remained on the razor’s edge.

“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.

“The 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, just below the 100 mark hit last week.

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.

“There’s nothing to deter people from dollar/yen positions,” said Ray Attrill, foreign exchange chief at National Australia Bank.

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, reversing some of the previous week’s gains. Euro stabilizes as Macron leads in first round of French elections

Fry Electronics Team

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