Forex – Euro comes off day’s lows, dollar index gives back gains

Forex
© Reuters.  Euro comes off day’s lows, dollar index gives back gains© Reuters. Euro comes off day’s lows, dollar index gives back gains

Investing.com – The euro pulled back from the day’s lows against the dollar and the yen on Tuesday, after weakening broadly earlier as European geopolitical fears sapped risk appetite.

was at 1.1163 by 06.22 ET, after falling as low as 1.1108 earlier.

The single currency came under pressure in early trade as worries over , the prospect of early Italian general election and European Central Bank President Mario Draghi’s comments about the need for all weighed.

The euro found some support after data showing that in the first quarter than first estimated.

Statistics body INSEE reported that French GDP expanded by in the three months to March, up from the preliminary estimate of 0.3%.

That means the French economy grew twice as fast as the UK economy at the start of the year, giving a boost to new president Emmanuel Macron.

was last at 123.92, still off 0.24% for the day after falling to 123.16 earlier, the lowest level since May 18.

The dollar was also weaker against the safe haven yen, with down 0.22% at 111.01.

In Japan, data on Tuesday showed that rose to its highest in more than 40 years in April while the unemployment rate held steady at a two-decade low.

The data bolstered optimism that tighter labor market conditions could help spur weak consumer spending and inflation.

Sterling pushed higher, with rising 0.15% to 1.2859, but gains were held in check as in the UK tightened, adding to political risk around Brexit.

Recent polls have indicated that Prime Minister Theresa May’s Conservative Party has less of a lead over the Labor Party than expected.

The pound was also higher against the euro, with down 0.22% at 0.8677.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.40, off the day’s highs of 97.67 as the firmer euro weighed.

Last week the index plumbed lows of 96.79, its weakest level since November 9 amid uncertainties over the Trump administration.

Investors were looking ahead to Friday’s U.S. employment report, which was expected to show that conditions in the labor market remain solid.

A strong U.S. jobs report would cement expectations for a rate hike by the Federal Reserve at its next meeting in June.

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