* Euro pulls away from 6-month high vs dollar, 1-year high
* Dollar index rises above 6-month low plumbed earlier
TOKYO May 8 The euro pulled away from highs hit
early in the Asian session on Monday as investors took profits
from its gains after centrist Emmanuel Macron's victory over the
far-right Marine Le Pen in France's presidential election.
Macron's resounding defeat of a nationalist who had
threatened to take France out of the European Union brought
relief to investors who had feared another populist upheaval
after Britain's vote to exit the European Union and Donald
Trump's election to president last year.
Macron's margin of victory appeared even larger than
expected. With most votes counted, he had garnered around 65.5
percent against Le Pen's 34.5 percent - a wider gap than the 20
or so percentage points pre-election surveys had suggested.
The euro had been on a rising trend in the days ahead of the
election, as investors began to position for a Macron victory.
"The market already priced in the victory of Macron," said
Masafumi Yamamoto, chief currency strategist for Mizuho
Securities in Tokyo, as U.S. Treasury yields rose. "We saw some
additional rise of the euro this morning, but considering the
difficulty for Macron's party to get a majority in the national
assembly election, he may not bring higher growth."
Looking at positioning in the euro, he said, "the market has
squared its short positions, but there are no fresh reasons to
take long positions, as there will likely be no new positive
developments, and limited scope for upside for the euro."
In early Asian trading the euro rose as high as $1.1024
, its highest since Nov. 9. It also jumped to a one-year
high of 124.58 yen against its Japanese counterpart,
and a five-month high of 1.08865 Swiss franc.
It last slipped 0.2 percent to $1.0975 against the dollar,
and to 123.76 yen, also down 0.2 percent.
The dollar was slightly lower on the day at 112.77 yen
, after jumping to a seven-week high of 113.14 yen in
The dollar index, which tracks the U.S. currency against a
basket of six major rivals, added 0.1 percent to 98.737,
after dipping as low as 98.387 earlier, its lowest since
Net long positions on the U.S. dollar fell sharply in the
latest week through May 2 to their lowest level since early
October, according to calculations by Reuters and Commodity
Futures Trading Commission data released on Friday, underscoring
the extent to which the greenback was a casualty of the euro's
The French election eclipsed Friday's U.S. employment data,
which showed nonfarm payrolls rose by 211,000 in April. The
unemployment rate fell to 4.4 percent, near a 10-year low and
well below the most recent Federal Reserve median forecast for
But job growth in March was revised downward to 79,000 from
98,000, and the labour force participation rate dipped slightly
to 62.9 percent from 63 percent. Overall, the figures did not
appreciably alter market expectations that the U.S. Federal
Reserve is on track to raise interest rates next month.
U.S. retail sales and core inflation data will be released
on Friday this week, and they could add to evidence backing
expectations of a Fed hike.
The dollar's early dip also lifted some emerging markets
currencies. The Mexican peso erased earlier gains and
slipped to 18.9715 per dollar after rising as 18.9050.
South Africa's rand moved away from a nearly four-week low
hit of 13.7075 per dollar hit on Friday to rise as high
as 13.4046. The dollar was last up 0.4 percent at 13.4634.
"We had such a severe wholesale liquidation of risk proxies
in the last couple of weeks, so it looks as if the market is in
consolidation phase at the moment, waiting for the next shoe to
drop," said Sue Trinh, head of Asia FX strategy at Royal Bank of
Canada in Hong Kong. "So those oversold currencies are finding
things are looking brighter at the start of the week."
Sterling was down 0.2 percent at $1.2956 after
rising as high as $1.2990 earlier in the session.
The Bank of England will hold a monetary policy meeting on
Thursday. None of 62 economists polled by Reuters expects the
bank rate to be adjusted from its record low of 0.25 percent, as
the central bank monitors the course of Brexit negotiations with
the European Union.
(Reporting by Tokyo markets team; Editing by Eric Meijer)