Euro inches up after Macrons victory, gains against bruised sterling

div classBodysc17zpet90 cdBBJodivpBy Alun Johnp

pHONG KONG Reuters – The euro gained a fraction in early trade on Monday following French President Emmanuel Macrons comfortable Sunday defeat of farright rival Marine Le Pen, the outcome largely expected by markets and political analysts.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe euro opened higher at 1.0840, was last trading at 1.0807, up 0.12 from Friday‘s close, but couldn’t break far from a twoyear low hit last week.p

pThe currency rose 0.14 against sterling to 84.22 pence, hitting a threeweek peak in early trade.p

pWith 97 of votes counted, Macron was on course for a solid 57.4 of the vote, interior ministry figures showed. In his victory speech he acknowledged that many people had only voted for him only to keep Le Pen out, and he promised to address the sense of many French that their living standards were slipping. p

p“Macrons clear victory is likely to reassure the markets that the European dynamic will continue. In the short term, the main logical beneficiary of this election could be the euro, which was still flirting last Friday with twoyear lows against the dollar,” said Frederic Leroux, a member of the investment team at Carmignac. p

p“The negative aspect for the markets of this rather comfortable election could however come from a quick decision in favour of a Russian oil embargo, which would exacerbate inflationary pressures and economic slowdown in Europe.”p

pThe euro, along with most of its major peers, has been bruised by an upward march by the dollar that is boosted by rising U.S. Treasury yields. Markets are repositioning themselves for an aggressive programme of rate hikes from the U.S. Federal Reserve.p

pThe dollar index was at 101.08 on Monday morning, just shy of a twoyear peak of 101.33 hit on Friday. p

pSterling was slightly softer against the dollar at 1.28275, after falling 1.4 on Friday to its lowest since November 2020. Weak sales and consumerconfidence data and Bank of England comments earlier in the week signalled a possible slowdown in the expected upward movement of British interest rates. p

pAmong major currencies, the Japanese yen has been the most affected by rising U.S. interest rates, with Japan keeping its benchmark yields pinned down. On Monday morning, the dollar was a tiny bit firmer on the yen at 128.63. p

pThe dollar has gained 11 on the yen so far this year. Last weeks 129.4 was the highest for dollaryen in 20 years. p

pThe Aussie dollar was also under pressure at 0.7233, its lowest against the dollar in a month, while bitcoin was hovering around 39,500, little changed over the weekend.p

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pp Reporting by Alun John Editing by Bradley Perrettp

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