The euro, on Tuesday, February 7, was set for its biggest daily fall of 2017 as broad gains halted a four-week run lower in the U.S. dollar, Reuters reports.
In morning trade in Europe, the single currency shed 0.8 percent to fall below $1.07, with investors again worried by Greece’s debt problems and signs that far-right candidate Marine Le Pen is gaining momentum before France’s presidential election.
Both represent large risks to the euro project as a whole and the cost of hedging volatility in the single currency against the dollar around the time of the final French vote on May 7 rose to its highest in over a week.
The dollar, recovering from its worst start to a year in three decades, gained against a basket of other currencies, rising 0.7 percent. It was on track for its biggest daily gain in a month.
That strengthening accelerated after China reported its foreign exchange reserves unexpectedly fell below $3 trillion level in January for the first time in nearly six years.
“The euro is on the defensive, with markets nervous not only about European political risks but also the upcoming reduction in ECB bond purchases,” said Jeremy Stretch, head of currency strategy at CIBC.
The Japanese yen gave up earlier gains against the dollar and at 0900 GMT was down 0.4 percent at 112.12 yen to the dollar .
The Australian dollar shed 0.5 percent to $0.7621, after the Reserve Bank of Australia left interest rates unchanged.
