Euro Advances as Macron Emerges Most Convincing in French Debate

  • ‘Retreat in political uncertainty’ adding to firmness: Mizuho
  • Macron led the debate for 29% of viewers: Elabe pollster

BNP Paribas' Morris Sees Macron Victory in France

The euro rose, approaching a six-week high, as political concerns in the region were seen as easing after a poll showed anti-euro candidate Marine Le Pen losing ground in the French presidential debate.

The single currency strengthened against all of its 10 major peers after a poll showed independent candidate Emmanuel Macron emerged as the most convincing of the five contenders in the national debate, ahead of Le Pen. A combination of macro offers and option-related selling helped the euro-dollar pair gain as the debate added little to risk, according to an Asia-based currency trader who asked not to be identified because the person isn’t authorized to speak publicly.

The euro has been rising after the European Central Bank at its meeting this month was said to have considered the question of raising interest rates before ending its bond buying program.

“The retreat in political uncertainty, euro zone’s existing huge current-account surplus and the ECB seemingly tilting toward a more hawkish stance are all contributing to the euro’s firmness,” said Daisuke Karakama, chief market economist at Mizuho Bank Ltd. in Tokyo. “Buying interest may strengthen as people’s expectations for further easing wane.”

  • EUR/USD up 0.1% to $1.0754; climbed to $1.0770 earlier, near Friday’s high of $1.0782, which was strongest since Feb. 6
    • Pair’s one-month risk reversals show the pressure on euro’s decline eased to weakest in more than four months on Monday
    • Residual leveraged shorts initiated ahead of French debate seen squaring up above 1.0750, more buy-stops above 1.0780, according to Asia-based FX trader
    • In snap Elabe poll of 1,157 adults who watched the French debate, Macron was seen as most convincing by 29%; Le Pen was convincing to 19% of those surveyed
  • USD/JPY up 0.2% at 112.76 after weak Nikkei opening on return from holiday saw leveraged USD/JPY sellers fill Tokyo trust bank bids under 112.40, says Asia-based FX trader
  • Bloomberg dollar index rises for the first day in five; 10-year Treasury yield also slightly firmer at 2.48% in Asia trading hours
    • Federal Reserve officials set to speak this week include Chair Janet Yellen on March 23