(Reuters) – The dollar struggles to find direction, while the euro remains near recent lows on fears that the new French government could weaken fiscal discipline, raising the risk premium for euro zone debt.
Meanwhile, the pound advanced after data showed British services inflation was stronger than expected.
US markets are closed today and trading will likely be subdued.
At 5.30 pm Italian time, the euro rose by 0.1% to 1.0743 dollars. It had hit a 1-1/2-month low of $1.07 on Friday.
The yield spread between French and German government bonds, seen as an indicator of the risk of a budget crisis in the heart of Europe, narrowed slightly from Monday but remained close to seven-year highs reached last week.
Rassemblement National leader Marine Le Pen has said she wants to coexist with President Emmanuel Macron and will respect institutions, sparking expectations that the French party could backtrack on fiscally burdensome promises if it wins the election.
The European Commission today proposed widely anticipated excessive deficit infringement procedures against France, Italy and five other European Union countries.
The dollar index is little moved at 105.213.
The pound rose 0.1% against the euro to 84.43 pence per euro and also against the dollar to $1.2719, after British data showed underlying price pressures remained strong.
(Translated by Camilla Borri, editing Antonella Cinelli)
