Dollar Recovering Its Losses

During today’s European session, the dollar is recovering its Friday losses, incurred on the back of Janet Yellen’s comments. The GBP/USD rate has fallen from 1.2300 to 1.2248.

The EUR/USD pair fell to 1.0585 after a rise to 1.0640. The single currency underwent a phase of growth lasting 20 minutes. After a 50-minute flat, and a rise in US bond yields, the euro fell to 1.0585.

I can’t give a full account of the relevant news, but there are a couple of items that could have affected the volatility of the EUR/USD pair. First of all, Republicans have been trying to convince Fillon not to run for president and give way to another candidate. The second bit of news is about the French PSA Group’s recent deal with General Motors’ European subsidiary.

The scandal surrounding Fillon has brought his party to a standstill. The Republicans have tried convincing him to stand down and make way for another candidate. It was earlier reported that Juppe may run instead should Fillon, the current Republican nominee, abandon the race. Fillon has said that he has no intention of quitting the race and that ex-Prime Minister Juppe has ruled himself out. On this news, Marine Le Pen looks to be the favorite, which is bad for the euro.

The biggest US car manufacturer is leaving Europe. The French PSA Group is buying General Motors’ European subsidiary for 2.2 billion EUR. The price had previously been announced in dollars. During the European session, PSA’s share price has increased by 2.8%.

So, it seems that news about the French presidential campaign has added some volatility to the market. There are no important statistical releases planned for Monday. For the EUR/USD pair, a fall to around 1.0572 is expected. Considering that when trading opened, we were at a session maximum of 1.0640, this fall could go further to around 1.0550/55.