Asia shares firm, euro dogged by French election deadlock
stocks inched higher on Monday as investors grew more confident about a September U.S. rate cut, while the euro grappled with political uncertainty as French elections pointed to a hung parliament.
In France, a leftist alliance unexpectedly took top spot ahead of the far right, a major upset that was set to prevent Marine Le Pen's National Rally (RN) from running the government.
The loss of the far right was something of a relief for investors, though they also have concerns the left's plans could unwind many of President Emmanuel Macron's pro-market reforms.
«It will be difficult for France to form a government and as the most likely potential outcome is now some arrangement between parts of the left and Macron,» said Holger Schmiedling, chief economist at Berenberg.
«This could mean some reform reversals rather than further reforms. The outcome I would say is less bad than could have been the case. It could have been much worse.»
The single currency dipped a fraction in reaction to $1.0825, having been as high as $1.0843 on Friday when a soft U.S. jobs report undermined the dollar.
The euro was also down 0.25% on the Swiss franc at 0.9680 francs, but held firm on the yen at 174.00. The dollar stood at 160.70 yen JPY=EBS>, just off its recent top of 161.86.
Equities were supported by hopes a U.S. policy easing was getting closer. MSCI's broadest index of Asia-Pacific shares outside Japan were up 0.1%, trimming earlier gains, after reaching a two-year top last week.
Japan's Nikkei held steady near record
