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* Dollar on track for best one-day gain since mid-December
* Euro hit by French election fears
* Technical buying also boosts dollar
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 7 The dollar climbed to a more
than one-week high on Tuesday as it gained for a fifth straight
session, bolstered by technical buying after recent losses, as
well as political uncertainty in Europe with a slew of elections
The greenback was on track to post it best one-day gain
since mid-December, rising at the expense of the euro, which has
struggled on renewed worries about Greece's debt problems and
signs that far-right candidate Marine Le Pen is gaining momentum
before France's presidential election.
"The dollar is benefiting from mounting political
uncertainty ahead of a number of crucial elections in the euro
zone and from buying by bargain-hunters, looking to pick up the
greenback following its worst start to the year in 30 years,"
said Omer Esiner, chief market analyst at Commonwealth Foreign
Exchange in Washington.
Elections in the Netherlands, Germany and possibly Italy,
more wrangling over Greece's bailout and an upcoming reduction
in the European Central Bank's monthly bond-buying are all
playing on investor nerves, analysts said.
In morning trade, the dollar index rose 0.6 percent to
100.53, recovering from its worst January performance
since 1987. It also gained 0.6 percent against the yen to 112.39
The dollar's gains accelerated after China reported its
foreign exchange reserves unexpectedly fell below the $3
trillion level in January for the first time in nearly six
The euro, meanwhile, fell 0.7 percent to $1.0677, on
pace for its worst daily performance in about three weeks.
France's tightly contested presidential race sank deeper
into smear and sleaze on Tuesday after centrist Emmanuel Macron
was forced to deny an extramarital affair and as scandal
continued to dog conservative Francois Fillon and his party.
"All in all it's been a virtuous tailwind for the U.S.
dollar this morning and there is also fear of capital flight
(from China) which is feeding safe-haven flows," said Jeremy
Stretch, head of currency strategy at CIBC in London.
Widespread predictions late last year that the U.S. currency
would gain in early 2017 have been upset by a combination of
worries about President Donald Trump's protectionist bent and
the global implications of his approach to geopolitics,
"Until we have answers to some of the big (policy) questions
I can't see any free space for dollar bulls to run into. They
are fearful of what the administration is prepared to do to
actually keep a lid on the dollar," said Neil Mellor, senior
currency strategist with Bank of New York Mellon in London.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
John Geddie and Patrick Graham in London; Editing by Dan