Euro Gains Support
The Euro continued to gain support in early Europe markets on Monday with some relief and short covering following the first round of the French presidential election. Although markets were still wary over the risk that National Front le Pen could secure an upset victory in the second round.
Higher German bond yields were a factor providing Euro support with the 10-year yield increasing to above 0.80% and the highest level for over seven years.
Sterling edged lower in early Europe on Monday with the latest batch of UK data releases causing further concern over the outlook. There were important concerns that the official level of GDP would be undermined by a dip in healthcare spending as coronavirus testing was scaled back sharply.
Although UK yields moved sharply higher on the day, overall yield spreads still moved against the UK currency given the surge in US yields. Sterling did again find support below 1.3000 against the dollar which encouraged a limited round of short covering, but sentiment remained weak.