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(Reuters) - Foreign exchange strategists in the latest Reuters poll have raised forecasts for the euro to a six-month high against the dollar, although the single currency is expected to edge down a little over the coming months.
They warned, however, that a shock victory for anti-euro Marine Le Pen in Sunday's French presidential election could send the euro down 5 percent.
The single currency has gained close to 4 percent so far this year, breaking a three-year losing streak during which it shed about a quarter of its value.
While the latest poll of more than 65 strategists showed the euro would slip about 1 percent in the coming year from the $1.09 it was trading at on Wednesday, it would still be above where it ended 2016.
"Political risks have had limited impact on the euro so it has kind of remained more resilient than anticipated," Bank of Tokyo-Mitsubishi UFJ currency economist Lee Hardman said.
The latest consensus forecasts in the Reuters poll are based on independent candidate Emmanuel Macron winning the French presidency on May 7.
Analysts were split on what margin Macron needs to win by for their forecasts to hold, with the range varying from as little as five percentage points to more than 20 percentage points. He has a roughly 20-point lead for now.
But if Le Pen, the anti-European Union candidate, wins, the euro will fall close to parity with the dollar, similar to predictions in last month's poll.
"I think we will get down closer towards parity if Le Pen was to win. Obviously there would be an initial kind of shock reaction," Hardman said.
At the beginning of the year, about a third of the Reuters FX poll panel was expecting the euro to either hit parity or trade below that by end-December, based on economic underperformance and a rising dollar. But only a handful see this happening now.
Much of analysts' dollar optimism at the start of the year was down to the surprise election of Donald Trump as U.S. President and the reforms he promised to bring in, including infrastructure spending and sweeping tax cuts.
But analysts are now skeptical about his ability to pass these through Congress after his failure to pass healthcare reform and a dearth of major successes in his first 100 days in office.
Speculators have left their long positions against the dollar unchanged and pared back short positions against the euro, according to recent CFTC data.
One reason why calls for a weaker euro have dwindled is the recent pick-up in euro zone economic data - the bloc's economy started the year by growing nearly three times faster on a quarter-on-quarter basis than the United States.
While the ECB is expected to remain on the sidelines this year, when asked about the next likely move, a majority of economists in a recent Reuters poll said it would extend its asset purchases program beyond December 2017 with a cut to the monthly spend.
That would probably push the euro up against the dollar.
(This online version of the story was refiled to say "favor" in the headline instead of "favours")
Polling by Indradip Ghosh and Vivek Mishra; Editing by Ross Finley and Louise Ireland