(Updates prices, adds comments; changes byline, dateline, pvs
* Euro touches $1.0953, highest since November 2016
* Traders look to ECB tapering after Macron debate victory
* Dollar hits nearly 7-week high vs yen of 113.04 yen
By Sam Forgione
NEW YORK, May 4 The euro hit its highest level
in roughly six months against the U.S. dollar on Thursday as
traders looked beyond the French elections to the potential for
the European Central Bank to signal further reduction in
bond-buying, while the greenback was steady against the yen.
The euro jumped to $1.0953, its highest since Nov.
10, 2016 as investors looked to a more hawkish ECB in June after
centrist Emmanuel Macron consolidated his position to win
France's presidential race in a Wednesday TV debate with anti-EU
candidate Marine Le Pen, which removed an element on uncertainty
for the euro.
Capital markets professionals have begun looking beyond the
ECB's imminent 20 billion euro monthly reduction in bond-buying
to a new environment without stimulus for several weeks, but the
assumption that Macron would win sharpened traders' focus on
higher European yields and a stronger euro as the results of a
less stimulative ECB.
"Everybody's still waiting for Draghi to mention a potential
tapering timetable," said Dean Popplewell, chief currency
strategist at Oanda in Toronto.
The dollar was little changed against the safe-haven yen
after touching a nearly seven-week high of 113.04 yen
earlier in the U.S. trading session. Traders said expectations
for two more interest rate increases from the Federal Reserve
this year after the central bank's Wednesday policy statement
kept the dollar strong against the Japanese currency.
Analysts have also said the closure of Tokyo markets for
Golden Week holidays was reducing liquidity and helping the
dollar remain buoyant against the yen.
The Fed statement "pretty much left the door open to a hike
in June," said Mazen Issa, senior FX strategist, at TD
Securities in New York. "The more interesting dynamic was what’s
happening for expectations further out beyond June."
Investors were awaiting Friday's monthly U.S. non-farm
payrolls report for greater clues on the Fed's rate hike
trajectory through the end of the year. Economists polled by
Reuters expect U.S. employers to have added 185,000 jobs in
April, up from 98,000 in March.
Commodity-linked currencies such as the Australian and New
Zealand dollars fell as oil prices tumbled. The Aussie hit a
nearly four-month low of $0.7383, while the kiwi hit
its lowest since June 2016 of $0.6840 as Brent crude
oil prices hit their lowest since Nov. 2016.
The dollar index, which measures the greenback against a
basket of six major rivals, was last down 0.2 percent at 98.979
(Reporting by Sam Forgione; additional reporting by Patrick
Graham in London; Editing by Meredith Mazzilli)