The euro struggled for traction against the dollar and yen early on Monday after suffering significant losses at the end of last week on renewed concerns about the upcoming French elections. (Reuters)
The euro struggled for traction against the dollar and yen early on Monday after suffering significant losses at the end of last week on renewed concerns about the upcoming French elections. Markets, already nervous over the possibility of a win for far-right, anti-European Union candidate Marine Le Pen, were jolted after two French hard-left candidates late on Friday said they were discussing cooperation in their bid for the country’s presidency.
The tensions over the political developments and what it could mean for the euro zone following Britain’s shock decision last June to exit the EU were keeping the single currency under pressure.
The euro was 0.1 percent higher at 1.0619 after dropping 0.6 percent on Friday. The common currency nudged up 0.15 percent to 119.935 yen after plumbing an 11-day low of 119.650. It had slid nearly 1 percent on Friday against the yen.
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“The latest round of risk aversion that supported the yen is likely to be a sporadic one, as equities are still well supported globally. It is not the typical ‘risk off’ that engulfs the broader financial markets and leads to the safe-haven buying of the yen,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities.
For now, the dollar was held in check by the relative strength of the yen. The greenback extended Friday’s drop and was down 0.1 percent at 112.850 yen, on track for a fourth straight session of losses. Hopes of developments in fiscal stimulus plans under U.S. President Donald Trump have also not materialised yet, adding to the drag on the dollar.
A combative presidential news conference on Thursday raised doubts over how effective the Trump administration will be in pushing through its economic agenda. The dollar index against a basket of currencies was down 0.15 percent at 100.800. Elsewhere, the pound rose 0.2 percent to $1.2431. The bounce was still modest in comparison to the 0.7 percent loss on Friday, after a surprise third monthly fall in British retail sales pointed to weakening consumer sentiment. The Australian and New Zealand dollars were little changed at $0.7667 and $0.7180, respectively.