Dollar ends mixed in holiday-thinned North American trading: Feb 21, 2017

Market Review - 20/02/2017 22:41GMT  

Dollar ends mixed in holiday-thinned North American trading

The following forex summary is taken from Thomson Reuters currency report. 

The euro rode out signs of gains for far-right French presidential candidate Marine Le Pen on Monday, inching higher against the dollar and the yen in trade held in check by the absence of U.S. investors because of a holiday. 

French bond yields -- the main measure of market concern over Le Pen's chances in April and May -- showed the biggest gap to German equivalents since 2012 after a poll showed the head-to-head gap to centrist favourite Emmanuel Macron closing. 

But the euro held on to some minimal gains, gaining 0.1 percent to $1.0616and 0.3 percent to 120.06 yen respectively. 

News that Socialist Benoit Hamon and hard-left rival Jean-Luc Melanchon were discussing cooperation in their bid for the presidency weakened the euro and supported the yen on Friday.

Investors believe such a tie-up could either backfire and propel anti-globalisation, anti-EU candidate Le Pen into the Elysee palace or succeed and land France with a far-left president pursuing deficit-boosting economic policies. 

But policy proposals outlined by Melanchon on Sunday underscored the gap he would have to bridge with Hamon to find a common platform for the April and May polls, also helping the euro.

The start of 2017 on currency markets has been dominated by disappointment with U.S. President Donald Trump's early fiscal and tax policies, turning back a reflation trade on the dollar that had bet on swift moves to encourage repatriation of capital to the United States and boost spending. 

Trade on Monday was cooled, however, by the absence of U.S. markets for the Presidents Day holiday. 

Stock markets in both Europe and Asia eked out some gains, pointing to a broadly more positive mood. That tends to benefit several of the major currencies at the expense of "safe havens" like the yen and Swiss franc. 

The latest analysis of investment flows from the world's biggest currency trader, Citi, showed the dollar is the most sold of the G10 group of major currencies over the past four weeks. Commodity Futures Trading Commission data on Friday showed speculators had reduced bullish bets on the dollar to their lowest in four months. 

The past week had seen investors sell the commodity-price related Australian and New Zealand dollars, they said.