Euro Suffered Losses Due to Concerns Regarding France

The euro declined on Tuesday against the Swiss franc and Swedish crown as French election worries and the chance of more sanctions against the Russian Federation unnerved investors.

French financial markets acknowledged the possibility of far-right candidate Marine Le Pen beating the country’s current leader Emmanuel Macron in this month’s elections, with sharp losses on the Paris blue-chip index as well as government bonds. 

Euro and other currencies

Against the U.S. currency, the euro briefly declined to more than a one-week low of $1.0956. As a reminder, the euro reached a one-month high of $1.1185 just days earlier amid increased optimism regarding Ukraine.

Expected price swings for the single currency or implied volatility rose to three-week highs as traders prepared for more sanctions. 

The single currency’s biggest losses on Tuesday were against the Swedish crown and Swiss franc. Against the Swedish crown, the euro dropped 0.4%. The single currency fell 0.2% versus the Swiss franc.

Western powers pledged on Monday to take measures against Russia over civilian killings in Northern Ukraine. The Russian Federation rejected accusations related to the murder of civilians. New sanctions against the country could include restrictions on the billions of dollars in energy that Europe buys from Russia.

The Australian dollar jumped on Tuesday. The country’s currency jumped to a nine-month high after Australia’s central bank signaled higher interest rates were closer. 

It gained 1.23% to $0.7639, the Australian dollar’s best result since June 14. The local currency rose after the central bank dropped its pledge to be “patient” on tightening policy while holding the key rate at a record low level, as expected. 

The dollar index which tracks the greenback against a basket of currencies dropped 0.07% to 98.902. The index declined to 98.902 from a one-week high of 99.083 reached overnight. 

The U.S. currency was flat against the Japanese yen at 122.73 yen.