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Title: Euro rises despite French election as dollar retreats

Jun 20, 2022 04:52AM ET

By: AnalysisWatch

The euro rose on Monday despite French President Emmanuel Macron losing an absolute majority in the country's parliamentary election, as the dollar retreated against its major peers after hitting a 20-year peak last week.

Macron's centrist Ensemble coalition secured the most seats in the National Assembly but fell well short of an absolute majority needed to control parliament, final results showed.

Analysts and traders shrugged off the election results, with the euro rising 0.2% against the dollar to $1.05155.

Last week, the European Central Bank promised to devise a new anti-fragmentation tool that should provide fresh support for the bloc's indebted southern rim.

The dollar edged 0.2% lower to 134.715 yen, after hitting 135.44 yen in Asia-Pacific trading hours, close to Wednesday's peak of 135.60, the highest since October 1998.

The dollar index, which measures the greenback against a basket of six currencies including the euro and yen, fell 0.25% to 104.44 but remained close to a two-decade high of 105.79 hit on Wednesday last week, the day the Federal Reserve raised interest rates by 75 basis points in an attempt to tame high inflation.

Fed Chair Jerome Powell will testify before the Senate and the House on Wednesday and Thursday this week.

The drift lower in the dollar is being driven mostly by thin trading with the U.S. markets observing a public holiday on Monday, said Osamu Takashima, head of G10 FX strategy at Citigroup (NYSE:C) Global Markets Japan.

The dollar lost 0.4% to 0.96525 Swiss francs, while sterling ticked up 0.1% to $1.2232.

The Australian dollar jumped 0.6% to $0.6980.

Leading cryptocurrency bitcoin remained weaker, however, falling 2% to $20,154, sliding back toward the weekend's low of $17,592.78, a level not seen since late 2020.

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