* Reuters graphics:
* Sterling and gilt yields: bit.ly/2dgAXn1
* World FX rates in 2017: tmsnrt.rs/2egbfVh
* Trade-weighted sterling since Brexit vote: tmsnrt.rs/2hwV9Hv
By Jemima Kelly and Ritvik Carvalho
LONDON, April 24 Sterling suffered its heaviest
one-day fall against the euro since early January on Monday, as
investors bought back into the single currency after a run-off
between two nationalist, anti-EU candidates was averted in
France's presidential race.
Centrist candidate Emmanuel Macron and the far-right Marine
Le Pen advanced to the second round, driving sharp gains for the
euro as investors took heart from opinion polls showing Macron
would soundly beat Le Pen - who has threatened to pull France
out of the euro zone.
The first round outcome spared investors their worst-case
scenario of Le Pen facing off against a surging far-left
eurosceptic Jean-Luc Melenchon, who had climbed in the polls in
recent weeks, though never broke into the top two.
The accuracy of pollsters ahead of Sunday's vote bolstered
confidence in their projection Macron would soundly win on May
Having rallied almost 2 percent last week to hit four-month
highs against the euro after British Prime Minister Theresa May
called a snap UK election, sterling reversed most of that move,
falling around 1.4 percent from Friday's close to just below 85
pence per euro.
"Because the polls were so accurate for round one, the fact
that they show Le Pen losing substantially in round two is a
reason for exuberance," said BMO Capital Markets currency
strategist Stephen Gallo, in London.
"I think sterling remains a buy on dips versus the euro," he
added, suggesting that sterling would probably trade sideways in
the lead-up to the June 8 British election.
Against the dollar, sterling was not far off highs hit last
week following May's election announcement, down around 0.2
percent on the day at $1.2790.
"I can't say we have many local drivers at the moment (for
sterling/dollar) really...the main volatility is coming from
euro/sterling and that is mainly euro-driven," said Thu-Lan
Nguyen, currency analyst with Commerzbank.
She said economic data would be an important driver for
sterling. The UK economy's relative resilience to the
uncertainty generated by last year's Brexit referendum has
propped up the currency this year following a near 20 percent
slide. But doubts, particularly over consumer demand, are
growing, fuelled by another poor batch of retail sales numbers
Preliminary first quarter gross domestic product data are
due on Friday.
Eyes will also be on the start of campaigning for Britain's
general election, with polls showing the ruling Conservative
Party has a comfortable lead over the opposition Labour Party.
(Editing by Richard Lough)