- Euro gains but French election remains on knife-edge
- Dollar index just shy of 100 mark reached last week
- Greenback hits fresh seven-year high versus yen
(Adds quotes, details; updates prices; changes byline; previous LONDON)
The dollar held just below two-year highs against a basket of currencies on Monday as it continued to be supported by higher U.S. Treasury yields, while the euro rallied after French leader Emmanuel Macron beat far-right challenger Marine Le Pen in the country's first round of presidential voting.
The greenback has gained as Treasury yields soar on expectation of more aggressive tightening by the Federal Reserve, with benchmark 10-year note yields US10YT=RR reaching 2.78% on Monday, the highest since January 2019.
But the euro EUR=EBS looked set to snap a seven-day losing streak against the U.S. currency, rising 0.12% to $1.0888. The U.S. dollar index =USD was last at 99.94, after reaching 100.19 on Friday, the highest since May 2020.
“There was maybe a bit of a relief rally, but it’s going to be hard for the euro to really get more upside traction until the event risk fully passes,” said Erik Nelson, a macro strategist at Wells Fargo in New York.
Macron will face Le Pen in what promises to be a tightly fought French presidential election runoff on April 24.
Meanwhile, the dollar continued to gain against the yen, which reached its weakest level since mid-2015. The Japanese currency has deteriorated as the Bank of Japan (BOJ) maintains a more dovish posture compared to increasingly hawkish peers such as the Fed.
“What we’ve heard from the BOJ so far has been very consistent that they’re not concerned about this move (in the yen) and, if anything, they’re comfortable with the move,” said Nelson. “Given the way rates are moving, the attractiveness of selling the yen and earning a positive rate of interest on that trade, that’s going to continue to be a one-way bet for I think quite a while.”
The dollar gained 0.95% to 125.46 yen. JPY=EBS China's yuan weakened against the dollar on investor concern over capital outflow and currency depreciation pressure after benchmark yield differentials between the Asian economic powerhouse and the United States turned negative.
Yields on China's 10-year government bonds fell below U.S. Treasury yields for the first time in 12 years as investors prepared for more monetary easing on the mainland and a widening divergence between the U.S. and Chinese economies.
The Russian rouble weakened sharply in jittery trade on Monday, reversing some of the previous week's gains, after the central bank decided to relax temporary capital control measures aimed at limiting a drop in the currency.
In cryptocurrencies, Bitcoin BTC=BTSP fell to three-week lows, and was last down 2.37% at $41,152. Ether ETH=BTSP fell 4.89% to $3,046.
======================================================== Currency bid prices at 9:53AM (1353 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 99.9390 99.8120 +0.14% 4.470% +100.0500 +99.6140 Euro/Dollar EUR=EBS $1.0888 $1.0875 +0.12% +0.00% +$1.0955 +$1.0874 Dollar/Yen JPY=EBS 125.4600 124.2800 +0.95% +0.00% +125.7700 +123.9700 Euro/Yen EURJPY= 136.59 135.14 +1.07% +0.00% +137.1200 +135.2900 Dollar/Swiss CHF=EBS 0.9333 0.9362 -0.29% +0.00% +0.9372 +0.9290 Sterling/Dollar GBP=D3 $1.3026 $1.3033 -0.06% +0.00% +$1.3056 +$1.2990 Dollar/Canadian CAD=D3 1.2622 1.2572 +0.41% +0.00% +1.2623 +1.2567 Aussie/Dollar AUD=D3 $0.7426 $0.7460 -0.44% +0.00% +$0.7465 +$0.7419 Euro/Swiss EURCHF= 1.0160 1.0158 +0.02% +0.00% +1.0205 +1.0161 Euro/Sterling EURGBP= 0.8359 0.8340 +0.23% +0.00% +0.8389 +0.8351 NZ NZD=D3 $0.6833 $0.6848 -0.22% +0.00% +$0.6854 +$0.6815 Dollar/DollarDollar/Norway NOK=D3 8.7850 8.7110 +0.71% +0.00% +8.7880 +8.7280 Euro/Norway EURNOK= 9.5670 9.4624 +1.11% +0.00% +9.5720 +9.4695 Dollar/Sweden SEK= 9.4662 9.4416 +0.36% +0.00% +9.4769 +9.4006 Euro/Sweden EURSEK= 10.3077 10.2710 +0.36% +0.00% +10.3229 +10.2727 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
