Euro builds on gains to reach $1.08; dollar index slips below 100

The euro has risen above $1.08 against the dollar for the first time in more than six weeks as the outcome of the first French presidential debate continues to boost the single currency.

The single currency gained 0.6 per cent to hit $1.0801, its strongest level since February 2nd, after opinion polls indicated that centrist candidate Emmanuel Macron had comfortably beaten his far-right, anti-euro rival Marine Le Pen in a televised debate on Monday night.

Sentiment on the euro has been improving this month after European Central Bank president said that the bank no longer had a “sense of urgency” to take further action on monetary stimulus, prompting speculation the ECB was preparing to trim its historic bond-buying programme.

Data released on Friday showed that short positions – bets the euro will fall – hit their lowest level in nearly a year, according to the weekly commitment of traders report from the US Commodity Futures Trading Commission.

The euro’s strength helped the dollar index to fall below 100 for the first time in six weeks, losing 0.4 per cent to hit 99.95.

Last Wednesday’s decision by the Federal Reserve to hike interest rates while signalling a cautious outlook for the rest of the year had a negative effect on the dollar, with the rate hike itself priced in while expectations of a faster pace of tightening this year were lowered.