Investing.com - The euro touched the day’s lows against the dollar on Monday after Alain Juppe, the most likely candidate to replace scandal-hit French presidential hopeful Francois Fillon, ruled himself out of the race.
EUR/USD touched lows of 1.0495 and was at 1.0589 at 10.17 GMT, off 0.3% for the day.
Fillon has refused to give up his candidacy despite allegations that his wife was paid thousands of euros in public money to be his parliamentary assistant, but did very little work.
Opinion polls have shown that Juppe would have progressed into the second round of the election had he chosen to run, while former front runner Fillon is expected to get eliminated in the first round.
Outgoing President Francois Hollande has warned that far-right candidate Marine Le Pen could win the election and vowed to "do everything" in his power to stop it happening.
Le Pen, the leader of the National Front, is likely to win the first round of France's election on April 23.
Polls indicate she would then lose in the second-round run-off on May 7 to centrist Emmanuel Macron.
Investors’ fears that a victory for Le Pen could potentially trigger a French exit from the euro zone.
The euro was also lower against the safe-haven yen, with EUR/JPY down 0.62% at 120.44.
Demand for the yen was underpinned amid concerns over rising geopolitical tensions in Asia after North Korea conducted missile tests early Monday.
Investors were also weighing the prospect of an interest rate increase by the Federal Reserve after Fed Chair Janet Yellen said Friday a rate hike "would likely be appropriate" this month if the economy remains on track.
The remarks cemented the view that the Fed will raise interest rates at its next meeting on March 14-15.
Futures traders are pricing in around an 84% chance of a hike at the Fed's March meeting, according to Investing.com’s Fed Rate Monitor Tool.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 101.57.