The euro surged against the U.S. dollar and the yen sank on Monday on relief over Emmanuel Macron’s victory against anti-euro nationalist Marine Le Pen in the first round of France’s presidential elections.
The euro was last 1.2 percent higher against the dollar at $1.0855, not far from the 5-1/2-month high of $1.0935 it reached after the initial indications from the Sunday vote gave victory to Macron, as predicted by weeks of polling.
The same polls showed Macron defeating Le Pen by as much as 30 percentage points in two weeks’ time, suggesting players can buy back into the currency. The euro’s session high briefly put the currency up about 2 percent against the greenback.
Sunday’s outcome reduced the prospect of an anti-establishment shock on the scale of Britain’s vote last June to quit the European Union and the election of Donald Trump as U.S. president.
The euro’s dip from its session high likely indicated profit-taking rather than doubts about a Macron victory over Le Pen in the second round, said Richard Franulovich, senior currency strategist at Westpac Banking Corp in New York.
“The news of Macron winning is now priced in,” he said. “The risks of a disintegration of the euro have been removed.”