Investing.com - The euro was holding below five-month highs against the dollar on Tuesday after a rally triggered by the first-round results of the French presidential election, while the yen weakened amid stronger risk appetite.
EUR/USD was up 0.19% at 1.0887 by 08.02 ET, not far from Monday’s peak of 1.0918, the highest level since November 11 after centrist former economy minister Emmanuel Macron won the first round of French presidential elections.
Polls, which were largely accurate in predicting the first round result, have indicated that Macron will comfortably beat euro skeptic nationalist Marine Le Pen in the runoff vote on May 7.
The dollar was at two-week highs against the traditional safe haven yen, with USD/JPY rising 0.69% to 110.53.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 98.89, not far from the one-month low of 98.70 set on Monday.
Markets showed little reaction after North Korea conducted a massive live-fire drill on Tuesday amid heightened geopolitical tensions with the U.S.
Investors were also eyeing events in Washington ahead of a looming deadline to avoid a government shutdown as they awaited more detail of a plan to overhaul tax from President Donald Trump.
Trump said last week that he would make an announcement about "a big tax reform and tax reduction" on Wednesday.
Trump has also indicated that he is flexible about waiting to secure funding for his promised border wall with Mexico, in a shift that could clear the way for lawmakers to reach a deal to avoid a government shutdown on Saturday.
Sterling was slightly higher against the dollar, with GBP/USD ticking up 0.2% to 1.2819.
Meanwhile, the Canadian dollar fell to the lowest levels in four months after the U.S. Commerce Department said it will impose new anti-subsidy duties averaging 20% on Canadian softwood lumber imports.
USD/CAD was last up 0.58% at 1.3580, the most since December 28.