* Graphic: Sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
By Ritvik Carvalho
LONDON, April 24 Sterling fell sharply against
the euro on Monday as investors favoured Europe's currency over
Britain's in a wave of relief sweeping financial markets
following results of the first round of France's presidential
The pound rallied nearly 2 percent last week, hitting
four-month highs against the euro, after British Prime Minister
Theresa May called for a UK general election in June.
But as centrist candidate Emmanuel Macron and far-right
Marine Le Pen advanced to the second round of France's
presidential race, the euro was bought broadly as investors
shrugged off worries that Le Pen - who has threatened to pull
France out of the euro zone - would take the presidency.
That move also pushed sterling lower, the pound reversing
nearly all of last week's gains versus the euro overnight and
last trading at 84.76 pence per euro, down 1.2 percent.
Against the dollar, sterling was not far off highs hit last
week following May's election announcement, down less than 0.1
percent on the day at $1.2805.
"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 one fifth
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 May's ruling Conservative
Party has a comfortable lead over the opposition Labour Party.
The Conservative Party's election manifesto will focus on
Brexit and domestic concerns, such as strengthening the economy
and putting a cap on energy prices, Work and Pensions minister
Damian Green said on Sunday.
Jeremy Corbyn, the leader of the Labour Party, said on
Sunday he could suspend British involvement in air strikes
against Syria if he was elected prime minister.
"The June 8th UK election has been overshadowed by events in
France," ING currency strategist Chris Turner wrote in a note to
"EU politicians have been quick to make clear that a few
extra Conservative back benchers don’t guarantee May a better
Brexit deal. Euro-sterling held the range low at 83 pence last
week and should stay supported. Cable supported by euro-dollar."
(Reporting by Ritvik Carvalho; editing by Ralph Boulton)