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Euro falls after France's Juppe pulls out of election race
[LONDON] The euro fell on Monday after former French prime minister Alain Juppe said he was not prepared to be a candidate in the country's presidential elections, with investors worried that made a victory by anti-EU leader Marine Le Pen more likely.
An opinion poll on Friday had suggested that if Juppe were to replace the beleaguered Francois Fillon as the centre-right candidate, he would win the first round of the election, with centrist candidate Emmanuel Macron coming second - a scenario that would knock Le Pen out of the race.
Having earlier traded slightly higher on the day, the euro hit the day's lows, falling to US$1.0591, down from US$1.0621 just before Mr Juppe's announcement.
"The euro is correlating very well with the chances of Le Pen winning or not winning - that's very much the euro trade at the moment," said Mizuho's head of hedge fund FX sales in London, Neil Jones.
"Anything that makes Le Pen winning more likely sends the euro lower."
French government bond yields edged up on the news, with the gap between 10-year French yields and their German equivalents widening to almost 64 basis points, off a one-month low hit on Friday just below 58 bps.