XM does not provide services to residents of the United States of America.

Dollar slips against euro as European political jitters subside



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>FOREX-Dollar slips against euro as European political jitters subside</title></head><body>

Updates to U.S. afternoon

By Saqib Iqbal Ahmed

NEW YORK, June 17 (Reuters) -The dollar slippedagainst the euro on Monday, as the common currency recovered from the more than one-month lows hit last week amidpolitical turmoil in Europe.

The euro EUR=EBS was up 0.25%to $1.07305on Monday, after touching asix-week low of $1.066775 last week following news of a snap parliamentary election in France.

European markets have been under pressure after President Emmanuel Macron called for thesnap election afterhis ruling centrist party was trounced byMarine Le Pen's eurosceptic National Rally in the European Parliament elections.

Investors have been contemplating the risk of a budget crisis at the heart of the euro area, as far-right and leftist parties gain momentum ahead of the Frenchelection, pressuring Macron's centrist administration.

Le Pen sought to allay some of those fears over the weekend, saying she would not seek Macron's resignation and that she is "respectful of institutions," in an interview with Le Figaro.

Even after the French financial markets endured a brutal sell-off late last week, European Central Bank policymakers have no plans to discuss emergency purchases of French bonds, five sources told Reuters.

"As French markets have begun to stabilize a bit since last week, the euro has responded with a slight touch of recovery," Helen Given, FX trader at Monex USA in Washington, said.

But Given said the trend remained in favor of the dollar.

"If U.S. retail sales come in weaker than expected tomorrow, as most data for the U.S. has been in the last few sessions, we could see a more substantial turnaround, but the underlying dynamic for the pair is driven very heavily by geopolitics at the moment," she said.

U.S. import prices fell for the first time in five months in May. The unexpectedly benign report from the Labor Department on Friday, combined with other recent data showing tame inflation readings, has helped keep a September interest rate cut bythe Federal Reserve on the table.

The dollar index =USD, which tracks the U.S. currency against a basket of six others, was 0.2% lower at 105.35.

The Fed published updated projections last week that showed the median forecast from all 19 U.S. central bankers was for a single interest rate cut this year.

Philadelphia Fed President Patrick Harker said on Monday that if his economic forecast plays out, the Federal Reserve would be able to cut its benchmark interest rate once this year.

The pound rose 0.15% to $1.2707 on Monday, though it remained close to the one-month low of $1.26575 touched in the previous session as traders await a policy meeting by the Bank of England this week.

Britain's inflation pressures still appear too hot for the Bank of England to cut rates at its meeting on Thursday, with a majority of economists polled by Reuters forecasting the first cut would not come until Aug. 1.

The yen remained pinned near a 34-year low against the dollar after the Bank of Japan on Friday pushed cuts to bond buying amounts. The dollar was last up 0.2% to 157.73 yen.

Traders remain on watch for signs that Japaneseauthorities might intervene to prop up the yen.

"All the fundamentals for the pair are in the favor of USD at the moment, and though some volatility does remain, the general trajectory has been more steady than we saw in March and April," Monex's Given said.

"I'd expect to see rhetoric from currency officials heat up around the 160 mark, but as it stands now it would take a lot for BoJ officials to finance another intervention - at a point, it might no longer be worth it," she said.

The Mexican peso slipped 0.4% on Monday on concerns about the fallout fromjudicial reforms proposed by President-elect Claudia Sheinbaum, while other currencies in Latin America weakened as U.S. Treasury yields rose on stronger-than-expected data.



Reporting by Saqib Iqbal Ahmed; Additional reporting by Amanda Cooper and Brigid Riley; Editing by Alex Richardson, Andrew Heavens, Andrea Ricci and Leslie Adler

</body></html>

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.