Macron lends a hand to the euro ahead of the ECB By Reuters
© Reuters. FILE PHOTO: Euro, Hong Kong dollar, US dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this illustration, January 21, 2016. REUTERS/Jason Lee/File Photo
By Tom Westbrook
SINGAPORE (Reuters) – The euro got off to a strong start to the week on investor relief that incumbent President Emmanuel Macron led the first round of France’s presidential election, while other moves were light ahead of bank meetings centers in Europe, Canada and New Zealand.
The euro briefly hovered as high as $1.0955 in the early hours of the Asian session, before settling around 0.15% higher than Friday’s close at $1.0890. It was also firmer on sterling and the yen.
With 88% of the votes counted, Macron garnered 27.41% and his far-right challenger Marine Le Pen was next with 24.9%.
They will contest a second round on April 24. Macron’s lead has given markets wary of Le Pen’s protectionism some confidence, even as he no longer advocates abandoning the euro, although gains were capped ahead of Thursday’s meeting of the European Central Bank.
“It’s uneven support,” said Westpac strategist Imre Speizer, as investors also grapple with an ECB that likely won’t look as aggressive as the Federal Reserve in tackling inflation.
“I think the bigger story of the two central banks being quite different is probably quite supportive for the US dollar in the long run,” he said.
The top 100 for the first time in nearly two years on Friday, and held steady at 99.805 in morning trading. Against the Japanese currency, the dollar was firm and bought 124.32 yen.
The ECB weighed rising consumer prices against the pressure on growth from the war in Ukraine. He is expected to give more details on a reduction in asset purchases on Thursday, but may not give other explicitly hawkish signals.
Central bank meetings are also scheduled in Canada and New Zealand on Wednesday and interest rate swap prices indicate traders see more than a 90% chance that each will raise rates by 50 basis points.
This could leave both currencies vulnerable if a lower rate hike is realized.
The New Zealand dollar fell 0.2% to $0.6836, while the Canadian dollar held steady at C$1.2583 per greenback.
Elsewhere, the Australian dollar also eased 0.2% to $0.7447 as gains in commodity-linked currencies begin to fade further with a pullback in export prices. The British pound held at $1.3026.
Bid rates for currencies at 0015 GMT
Description RIC Last US Close Pct Change YTD Pct Highest Bid Lowest Bid
$1.0888 $1.0875 +0.13% +0.00% +1.0955 +1.0883
124.3700 124.2900 +0.06% +0.00% +124.4200 +124.3600
135.42 135.14 +0.21% +0.00% +135.6500 +135.2900
0.9343 0.9362 -0.21% +0.00% +0.9344 +0.9290
1.3028 1.3033 -0.04% -3.67% +1.3040 +1.3028
1.2588 1.2572 +0.14% -0.44% +1.2590 +1.2567
0.7448 0.7460 -0.17% +2.45% +0.7465 +0.7440
Dollar/Dollar 0.6837 0.6848 -0.19% -0.14% +0.6854 +0.6832
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