(Updates prices, adds comment, changes byline, dateline; previous LONDON)
* Euro eases from 6-month high vs dollar, 1-yr high vs yen
* Dollar index rises above 6-month low plumbed earlier
* Euro prospects brighten after Macron’s victory
By Gertrude Chavez-Dreyfuss
NEW YORK, May 8 (Reuters) - The euro fell from six-month highs against the dollar on Monday, after Emmanuel Macron’s widely expected victory in France’s presidential election, as investors took profit on a roughly three percent gain for the currency since he won the first round two weeks ago.
Macron’s overwhelming win on Sunday briefly pushed the euro above $1.10 versus the greenback, the highest since the U.S. presidential election in November.
“The euro couldn’t sustain the rally as it took to consolidating a 3 percent spike since France’s presidential vote started two weeks earlier,” said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
“Nevertheless, the euro appears to have emerged from the French vote with a relatively bullish bias as dissipating political risk should intensify the spotlight on the (European Union) bloc’s improving economic prospects.”
Macron’s defeat of nationalist Marine Le Pen has relieved investors who had feared another populist upheaval after Britain’s vote to exit the European Union and Donald Trump’s election as U.S. president.
The euro rose as high as $1.1023, a six-month peak. It also jumped to a one-year high of 124.58 yen.
But by midmorning in New York, the euro fell 0.5 percent to $1.0944 against the dollar, and 0.4 percent versus the yen to 123.45 yen.
The removal of the political risk investors had associated with Le Pen - who had promised to take France out of the euro - prompted investors to refocus on economic fundamentals and the pace of monetary policy normalization in Europe and the United States.
Short positions on the euro reached their lowest level since early May 2014 in the week up to last Tuesday, data showed on Friday.
“It’s really a question now of what’s going to happen next with respect to the U.S. Federal Reserve with one rate rise priced in between now and the end of the year, and what’s the probability that the European Central Bank will look to taper monetary policy before the end of the year,” said Michael Hewson, chief markets analyst at CMC Markets in London.
Friday’s U.S. job numbers were solid and yield spreads support the dollar over the euro. But traders were also more confident about the prospect of the European Central Bank moving away from its bond-buying stimulus program.
The dollar index, which tracks the U.S. currency against a basket of six rivals, added 0.3 percent to 98.966, after dipping as low as 98.543 earlier, its lowest since November.
Additional reporting by Ritvik Carvalho in London; Editing by Bernadette Baum