Dollar firms vs euro with French election in focus

Fri Apr 21, 2017 4:01pm EDT
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - The euro weakened against the U.S. dollar on Friday as investors braced for Sunday's first round of a tight French presidential election.

The euro was down 0.14 percent against the dollar at $1.0699, off the session low of $1.0683. The common currency was 0.33 percent lower against the yen and down 0.27 percent against the Swiss franc.

"We have got overall de-risking happening. You have people keeping the powder dry ahead of Sunday," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.

"Traders are looking liquidity and countries with a strong net international position."

Opinion polls suggest that France's election will likely come down to a second-round duel between independent centrist Emmanuel Macron and Marine Le Pen, head of the anti-European Union and anti-immigrant National Front.

Polls showing Macron in pole position ahead of the vote and an upbeat Purchasing Managers' Index survey from France helped steady investors' nerves somewhat and the euro was still on pace for its best week in 11 against the dollar.

Still, the options markets EURVOL= suggests investors are concerned about the chances of strong results for far-right candidate Le Pen and far-left rival Jean-Luc Melenchon.

The dollar, which has been pressured lately by weaker-than-expected economic data and worries about the Trump administration's ability to pass tax and fiscal stimulus legislation, rose on Friday as traders squared up positions ahead of the weekend.   Continued...

Dollar banknotes and Euro banknote and coins are seen in front of destroyed Euro saving money box in this picture illustration taken February 16, 2017. REUTERS/Dado Ruvic/Illustration