Investing.com - The euro backed away from six-week lows against the dollar on Wednesday as fears over the outcome of France’s presidential election eased after French centrist politician Francois Bayrou said he would not run.
EUR/USD was at 1.0530 at 10.55 ET after falling to lows of 1.0494 earlier, the weakest level since January 11.
Bayrou said in a press conference that he would not run for election and instead pledged to support independent candidate Emmanuel Macron.
If Bayrou had run he would likely have reduced support for Macron and increased the chances of anti-European Union Marine Le Pen winning the presidency.
Investors’ fears that a victory for far-right Le Pen, who is the front runner to win the first round vote, could potentially trigger the country’s exit from the euro area.
The euro also pared back losses against the yen and the pound, with EUR/JPY last at 119.43, off earlier lows of 118.63, the weakest level since November 29.
EUR/GBP was up 0.12% to 0.8459 after falling to a low of 0.8403 earlier, the lowest level since December 21.
Demand for the dollar continued to be underpinned as investors awaited the minutes of this month’s Federal Reserve policy meeting, due to be published later Wednesday, for fresh signals on the expected pace of rate hikes.
The Fed last raised interest rates in December and has indicated that it could hike rates three times this year.
According to Investing.com's Fed Rate Monitor Tool around 22% of traders expect the Fed to raise interest rates at its next meeting in March. The chance of a May increase was seen at around 50%, while June odds were at 73%.
Meanwhile, U.S. data on Wednesday showed that existing home sales jumped to a 10-year high in January.
The National Association of Realtors said home resales climbed 3.3% to a seasonally adjusted annual rate of 5.69 million units last month. That was the highest level since February 2007.