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Forex - Dollar regains strength on French vote

Published 04/22/2012, 08:42 PM
Updated 04/22/2012, 08:45 PM
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Investing.com - The dollar rose against most major currencies on Monday on reports that French Nicolas Sarkozy trailed Socialist challenger François Hollande in Sunday's elections, leaving both candidates headed to a runoff in May.
 
The euro fell against the dollar in Asian trading Monday, with EUR/USD down 0.13% and trading at 1.3201.

The euro hit a two-week high against the dollar Friday on bullish business morale data out of Germany, Europe's largest economy.

The German Ifo business sentiment index for April rose to 109.9 from 109.8 the previous month, outpacing expectations for the figure to drop to 109.5.

April's figure represented a nine-month high.

Furthermore, G20 countries agreed to extend USD430 billion in fresh funding to the International Monetary Fund to help the multilateral lending institution contain the eurozone debt crisis and cushion the rest of the world from it.

Uncertainty in France, however, sent investors snapping up dollar positions, as President Nicolas Sarkozy and Socialist challenger Francois Hollande were headed for a runoff.

Hollande has called less for austerity measures and more on tax hikes.

Meanwhile, right-wing candidate Marine Le Pen snapped up a surprising 20 percent of the votes, catching markets off guard.

The dollar also gained appeal as investors sought safety ahead of key indicators due out of Europe later Monday.

The eurozone is set to unveil preliminary reports on manufacturing and services purchasing managers’ indexes in France, Germany and throughout the single currency bloc.

The greenback, meanwhile, was up slightly against the pound, with GBP/USD up 0.01% and trading at 1.6124.

The U.S. currency was up against the yen, with USD/JPY trading up 0.06% at 81.57, and up against the Swiss franc, with USD/CHF up 0.13% and trading at 0.9102.

The dollar was up against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.14% at 0.9936, AUD/USD down 0.12% at 1.0367 and NZD/USD down 0.13% at 0.8176.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.11% at 79.37.

Aside from European output figures set for release later Monday, markets will look ahead to new home sales in the U.S. due out on Tuesday.







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