Euro Slides Amid Risk Aversion, French Political Uncertainty

The euro weakened against other major currencies in the European session on Monday amid risk aversion, in the wake of political upheaval in France following President Emmanuel Macron's demand for an early legislative election.

French President Emmanuel Macron called a shock election after being trounced in the European Union vote by the far-right parties.

Italian Prime Minister Giorgia Meloni's far-right party has won European elections in Italy with a strong 28 percent of the votes.

Markets in China, Hong Kong and Australia are closed for public holidays.

In the European trading now, the euro fell to nearly a 2-year low of 0.8453 against the pound and nearly a 2-month low of 0.9642 against the Swiss franc, from early highs of 0.8472 and 0.9668, respectively. The euro is likely to find support around 0.82 against the pound and 0.93 against the franc.

Against the yen and the U.S. dollar, the euro slipped to a 5-day low of 168.71 and a 1-month low of 1.0748 from early highs of 169.22 and 1.0782, respectively. The next possible downside target for the euro is seen around 164.00 against the yen and 1.05 against the greenback.

Against the Australia and the Canadian dollars, the euro dropped to a 4-day low of 1.6301 and a 1-week low of 1.4790 from early highs of 1.6388 and 1.4838, respectively. If the euro extends its downtrend, it is likely to find support around , 1.61 against the aussie and 1.46 against the loonie.

The euro edged down to 1.7591 against the NZ dollar, from an early high of 1.7670. On the downside, 1.74 is seen as the next support level for the euro.

Meanwhile, the safe-haven currency or the U.S. dollar, strengthened against its major rivals amid risk aversion.

The stronger-than-expected jobs data for May also boosted the dollar and reduced hopes of an interest rate cut by the Federal Reserve in September.

Data from the Labor Department showed on Friday that non-farm payroll employment surged by 272,000 jobs in May after climbing by a downwardly revised 165,000 jobs in April.

Economists had expected employment to increase by about 185,000 jobs compared to the addition of 175,000 jobs originally reported for the previous month.

Against the pound, the Swiss franc and the yen, the U.S. dollar advanced to 1-week highs of 1.2707, 0.8983 and 157.20 from early lows of 1.2731, 0.8957 and 156.72, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.24 against the pound, 0.93 against the franc and 160.00 against the yen.

Against Australia, the New Zealand and the Canadian dollars, the greenback advanced to a 1-month high of 0.6576, nearly a 2-week high of 0.6099 and nearly a 1-1/2-month high of 1.3774 from early lows of 0.6596, 0.6112 and 1.3756, respectively. The greenback may test resistance near 0.63 against the aussie, 0.58 against the kiwi and 1.39 against the loonie.

Looking ahead, U.S. CB employment trends index for May is slated for release in the New York session.

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