Euro Hits Three-Week High Amid Short Covering Before France Vote
- Pound erases Wednesday drop as hedge funds add upside exposure
- Dollar-yen holds near 109.00 level as large expiries gravitate
Pricing the Rise of Melenchon in the French Election
The euro rose to its strongest level versus the dollar since March 29 as investors reduced short positions in the spot market before the first round of the French presidential elections.
Investors have cut back on hedging positions throughout the week, with euro-Swiss franc hitting a two-week high Thursday. Demand for fresh long exposure versus the dollar was also seen as euro bulls took comfort from $1.0700 support holding up, according to foreign-exchange traders in Europe and the Middle East. Downside exposure in the common currency is mainly expressed through vanilla puts and one-touch structures, albeit some unwinding also took place lately in the options market, said the traders, who asked not to be identified as they weren’t authorized to speak publicly.