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Euro volatility collapses as Le Pen fears evaporate
April 24, 2017 / 7:19 AM / 8 months ago

Euro volatility collapses as Le Pen fears evaporate

LONDON (Reuters) - Market measures of expected volatility of the euro sank on Monday, pointing to a collapse in bets on a market shock from the second round of French presidential elections in two weeks’ time.

Euro coins are seen in front of a displayed stock graph in this photo illustration taken in Zenica, Bosnia and Herzegovina, June 30, 2015. REUTERS/Dado Ruvic/Files

One-month volatility euro-dollar implied volatility - an options market measure of expected swings in the currency over the next month - fell to its lowest in almost three weeks after Sunday’s first round voting pointed to results in line with opinion polls.

It fell to 8.4 percent from 12.85 percent late on Friday, marking the largest one-day fall on record, according to Reuters data.

One-week volatility, which was the highest it had been since last June’s Brexit referendum at close to 20 percent on Friday, also fell back to 8.55 percent, according to Reuters data.

While anti-EU nationalist Marine Le Pen qualified for the second round run off in a fortnight, polls so far have shown her 25-30 points behind frontrunner Emmanuel Macron, who as predicted by pollsters won Sunday’s first round.

Reporting by Patrick Graham; Editing by Jamie McGeever

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