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FOREX-Yen rises as political worries stoke safe-haven bids
February 17, 2017 / 4:58 PM / 10 months ago

FOREX-Yen rises as political worries stoke safe-haven bids

    * News on French left in presidential race pressures on euro
    * Lack details on Trump's economic plan weighs on dollar
    * U.S. financial markets to close on Monday for holiday

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Feb 17 (Reuters) - The yen rose against major
currencies on Friday as concerns about the upcoming French
elections and the lack of movement in fiscal changes in the
United States kindled safe-haven demand for the Japanese
    The dollar improved versus most peers with the exception of
the yen, leaving it little changed on the week following mildly
hawkish view from Federal Reserve Chair Janet Yellen and
surprising strong U.S. data on retail sales and consumer prices.
    "We are trading in this political policy vacuum," Mazen
Issa, senior FX strategist at TD Securities in New York, said of
the dollar. "We are going to see things whipsaw around."
    Weaker stock prices around the globe, together with a
three-day U.S. holiday weekend, further fed appetite for the
yen, bonds and other less risky assets.
    The yen was up 0.3 percent against the dollar at 112.81 yen
 and was 0.8 percent higher versus the euro at 119.87 yen
    News the French left could unite behind one candidate in
presidential elections, possibly knocking centrist and
right-leaning nominees out of the race in the first round,
raised a new scenario for a second-round runoff. This possible
alliance could increase the chances of anti-EU, anti-immigrant
Marine Le Pen winning the presidency. 
    In the wake of this political development, the euro fell 0.5
percent against the dollar at $1.0623, holding above a
five-week low of $1.0520 struck on Wednesday.   
    The euro's weakness helped stabilize the dollar as traders
had pared bullish bets on the greenback earlier this week on
reduced expectations the Federal Reserve will raise interest
rates at its March 14-15 policy meeting.
    They concluded Fed Chair Janet Yellen did not offer enough
conviction of a March rate increase at her two-day testimony
before Congress where she raised the possibility the central
bank may raise rates more than twice in 2017.
    A combative presidential news conference on Thursday
following the resignation of National Security Adviser Michael
Flynn this week raised doubts how effective the Trump
administration will be in pushing through its economic agenda,
with the goal to pump up the U.S. economy.
    "Yesterday’s news conference perhaps was also an additional
factor moderating that Trump theme," said Josh O'Byrne, Citi's
currency strategist in London.
    The dollar index was last up 0.4 percent at 100.82,
reversing Thursday's 0.7 percent drop that was its steepest
one-day loss in over two weeks.
    Currency bid prices at 11:17AM (1617 GMT)
 Description      Last           U.S. Close  Pct Change
 Euro/Dollar      $1.0621        $1.0672     -0.48%
 Dollar/Yen       112.8300       113.2000    -0.33%
 Euro/Yen         119.85         120.85      -0.83%
 Dollar/Swiss     1.0014         0.9965      +0.49%
 Sterling/Dollar  1.2429         1.2487      -0.46%
 Dollar/Canadian  1.3118         1.3070      +0.37%
 Australian/Doll  0.7660         0.7694      -0.44%
 Euro/Swiss       1.0636         1.0641      -0.05%
 Euro/Sterling    0.8546         0.8543      +0.04%
 NZ               0.7184         0.7208      -0.33%
 Dollar/Norway    8.3365         8.2854      +0.62%
 Euro/Norway      8.8573         8.8451      +0.14%
 Dollar/Sweden    8.9057         8.8589      +0.06%
 Euro/Sweden      9.4624         9.4563      +0.06%

 (Additional reporting by Patrick Graham in London; Shinichi
Saoshiro in Tokyo; editing by John Stonestreet and Chizu

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