Euro Extends Gain On French Election Solace
April 25 2017 - 02:49AM
RTTF2
The euro continued to be higher against the other major
currencies in the European session on Tuesday, as victory of French
centrist candidate and market-favorite Emmanuel Macron in the first
round backed hopes that he would defeat far-right rival Marine Len
Pen in the run-off vote on May 7.
Since most polls showed an overwhelming victory to Macron with
more than 60 percent of vote on the second round, the fears over an
anti-euro shock had abated.
France's outgoing president, Francois Hollande, has urged voters
to back centrist Macron in the second round of the election,
warning that far-right leader Marine Le Pen would be a "massive
risk" for the economy and jobs.
The European Central Bank meets this week, with economists
expecting no policy changes despite recent indications of robust
growth and surging inflation. All eyes are on the ECB President
Mario Draghi's press conference, which is likely to shed more clues
about the economic outlook.
Preliminary figures from Eurostat showed that Eurozone general
government deficit to GDP ratio declined in the fourth quarter of
2016 after widening in the previous three months.
As a percentage of GDP, the seasonally adjusted government
deficit was 1.4 percent in the final three months of 2016 versus
1.6 percent in the third quarter.
In an interview with the Austrian newspaper Der Standard, the
ECB policymaker Ewald Nowotny said that uncertainty about the
future measures of the Trump administration is particularly
worrying and the problems from Brexit may be underestimated as of
now, both posing political risks for the European economy.
"One of our interlocutors in Washington told us that Trump and
his team did not expect to win," Nowotny said.
The currency held steady against its major rivals in the Asian
session, with the exception of the yen.
The common currency advanced to 1.0896 against the greenback and
0.8510 against the pound, from Monday's closing values of 1.0865
and 0.8493, respectively. Continuation of the euro's uptrend may
see it challenging resistance around 1.10 against the greenback and
0.86 against the pound.
The 19-nation currency climbed to a 4-1/2-month high of 1.0838
against the Swiss franc and near a 4-week high of 120.38 against
the yen, compared to yesterday's closing quotes of 1.0820 and
119.25, respectively. The next possible resistance for the euro is
seen around 1.10 against the franc and 122.00 against the yen.
The single currency strengthened to 1.4779 against the loonie,
its strongest since November 2016. The euro is seen finding
resistance around the 1.49 level.
The euro rose to a 6-1/2-month high of 1.5667 against the kiwi
and a 3-1/2-month high of 1.4462 versus the aussie, from Monday's
closing values of 1.5484 and 1.4355, respectively. The euro is
poised to challenge resistance around 1.58 against the kiwi and
1.47 against the aussie.
Looking ahead, U.S. S&P/Case-Shiller home price index and
Federal Housing Finance Agency's house price index for February,
new home sales for March and consumer confidence for April are due
in the New York session.
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