CURRENCIES: Dollar Gains Against Euro Ahead Of French Election; Sags Versus Yen

Date : 21/04/2017 @ 12:48
Source : Dow Jones News

CURRENCIES: Dollar Gains Against Euro Ahead Of French Election; Sags Versus Yen

By Rachel Koning Beals

Pound lower as U.K. retail sales fell steeply in March

The dollar gained versus the euro and against most leading rivals on Friday ahead the first round on Sunday of a tight French presidential race that likely holds implications for the eurozone economy.

The broad-based ICE U.S. Dollar Index rose 0.1% to 99.92. The euro was worth $1.0696, slipping from $1.0718 late Thursday in New York.

"Investors are evidently cautious ahead of Sunday's French elections: not only has the euro fallen but European equity markets were also flat across the board this morning, despite that sharp rally on Wall Street yesterday," said Fawad Razaqzada, technical analyst with FOREX.com.

The latest polling indicates that French centrist presidential candidate Emmanuel Macron remains the front runner in what is expected to be a tight contest. The first round of voting will take place on Sunday, with a second round coming May 7.

Far-right National Front candidate Marine Le Pen has advocated for France to ditch the euro and leave the European Union. Far-left candidate Jean-Luc Melenchon, another euroskeptic, has recently surged in the polls while conservative Francois Fillon's scandal-stricken campaign has seen a rebound in support.

Read:How to dazzle voters on the campaign trail? Upstart French candidate turns to holograms (http://www.marketwatch.com/story/how-to-dazzle-voters-on-the-campaign-trail-communist-backed-french-candidate-turns-to-holograms-2017-04-11)

Read: Here's a sign euro traders are dangerously complacent about the French election (http://www.marketwatch.com/story/heres-a-sign-euro-traders-are-dangerously-complacent-about-the-french-election-2017-04-20)

And: Here's how France's hotly contested election could spark market turmoil (http://www.marketwatch.com/story/heres-how-frances-hotly-contested-election-could-spark-market-turmoil-2017-04-19)

"Generally speaking though, the EUR/USD continues to trade inside an ugly range," said Razaqzada. "My longer-term outlook on the EUR/USD is neutral for now but will turn decidedly bearish if and when that old support area of 1.0460-1.0525 breaks down."

Against its Japanese counterpart, however, the greenback slipped to Yen109.12 compared with Yen109.32 late Thursday in New York. The euro had reached a high of $1.0779 Thursday, the strongest level since March 28, according to FactSet data.

The dollar had climbed against the yen late Thursday after Treasury Secretary Steven Mnuchin affirmed that there's bipartisan support for raising the U.S. debt ceiling, and that an extension would likely be approved by the summer.

Investors have grown increasingly anxious since the U.S. reached the limits of its legal authority to borrow back in March, worrying that the same fractiousness that prevented President Donald Trump from passing his plan to repeal and replace Obamacare might also stymie a debt-ceiling accord.

(http://www.marketwatch.com/story/heres-how-frances-hotly-contested-election-could-spark-market-turmoil-2017-04-19)Meanwhile, the pound bought $1.2777, compared with $1.2813 late Wednesday. The currency, and U.K. stocks, fell after weak economic data.

U.K. retail sales fell steeply on the month in March, data showed Friday, as price increases fueled by the pound's sharp post-Brexit vote depreciation caused Britons to rein in spending.

Sales in March fell by 1.8% from the previous month (http://www.marketwatch.com/story/uk-retail-sales-fall-sharply-in-march-2017-04-21), the Office for National Statistics said, significantly more than the 0.1% fall predicted by analysts polled by The Wall Street Journal. Compared with March last year, sales rose by 1.7%, also significantly below analysts' expectations.

Read:Why the snap U.K. election is a 'game changer' for the pound (http://www.marketwatch.com/story/heres-why-the-pound-surged-to-10-week-high-after-may-called-snap-uk-election-2017-04-18)

Also:Snap election 'virtually rules out' the U.K. staying in EU's single market (http://www.marketwatch.com/story/uk-snap-election-virtually-rules-out-staying-in-eus-single-market-says-morgan-stanley-2017-04-19)

 

(END) Dow Jones Newswires

April 21, 2017 07:33 ET (11:33 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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