By Hilary Russ
| NEW YORK
NEW YORK The euro fell to a one-week low against the dollar on Monday on uncertainty ahead of several impending European elections, while European and U.S. stock markets dipped ahead of a heavy week of corporate results.Concerns over French politics ahead of the presidential vote in April, as well as other elections in Europe later in the year, dented the euro."Political risk is serving to dampen the euro after last week's stumble from the $1.08 area," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.Investors were largely focused on French politics, as far-right National Front leader Marine Le Pen launched her presidential bid, vowing to fight globalization and take France out of the euro zone.In mid-morning trading, the euro fell 0.4 percent against the dollar to $1.0737 EUR=. It dropped to $1.0705, its weakest level since Jan. 31.The dollar slid to its lowest in more than two months against the yen JPY=, pressured by a drop in U.S. Treasury yields, analysts said.But the greenback rose 0.2 percent .DXY against a basket of major currencies.
In the U.S. equity market, key indexes were modestly lower ahead of a slew of results and lingering uncertainty over the policy decisions of President Donald Trump and the potential impact of these on the economy.The Dow Jones Industrial Average .DJI rose 4.83 points, or 0.02 percent, to 20,076.29, the S&P 500 .SPX lost 2.68 points, or 0.12 percent, to 2,294.74 and the Nasdaq Composite .IXIC dropped 0.31 points, or 0.01 percent, to 5,666.46..Oil slipped as the strong dollar and ample U.S. supplies outweighed OPEC output curbs and rising tensions between the United States and Iran.Brent crude LCOc1 was trading at $56 a barrel, or 1.4 percent, having touched an intra-day high of $57.13. U.S. crude CLc1 was down 40 cents, or 1.1 percent, at $53.24.
There was no overarching theme to Monday's market moves, highlighting how correlations between financial market assets have broken down in recent months as investors sense the era of ultra-loose monetary policy may be winding up."There is a sense of general uncertainty and I'm not sure if you can pin-point it to anything in particular," said Orlando Green, European fixed income strategist at Credit Agricole. "You could say markets are a bit edgy about the political scene in Europe, the political scene in the U.S. and there's a bit of uncertainty about when the Fed will hike rates next." The pan-European STOXX 600 index was 0.57 percent lower, with banking stocks .SX7P, particularly in Italy .FTIT8300, weighing on the index.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.65 percent.Japan's Nikkei .N225 rose 0.3 percent, with banks rising after U.S. President Donald Trump signed an executive order to scale back regulations in the U.S. financial industry that were implemented after the financial crisis nearly a decade ago.Trump meets Japanese Prime Minister Shinzo Abe on Feb. 10 and 11, with trade and currencies likely to be on the agenda. (Additional reporting by Gertrude Chavez-Dreyfuss in New York; Nigel Stephenson and Alex Lawler in London; Editing by Bernadette Baum)
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Updated Date: Feb 07, 2017 01:45 AM