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Kiwi slips on euro following French poll

NZ Newswire logoNZ Newswire 23/04/2017 Jonathan Underhill

The New Zealand dollar has declined against the euro after French centrist politician Emmanuel Macron and the far-right Marine Le Pen made it through the first round of the presidential election, with optimism Macron will garner enough support to prevail.

The kiwi slipped to 64.45 euro cents as at 8am on Monday in Wellington from 65.53c in New York on Friday. It rose to US70.35 cents from US70.19c.

Early results put Macron at 23.7 per cent support and Le Pen on 21.7 per cent while Conservative leader Francois Fillon on 19.5 per cent conceded defeat and urged supporters to back Macron. There had been some speculation Front National's Le Pen could stage a late surge in support after the shooting of a policeman in Paris. Macron, who set up his En Marche party just a year ago, has campaigned on establishing a more business-friendly economy. The two front-runners will face each other in a second vote on May 7.

"This morning French voters delivered the result the markets were hoping for," said traders at HiFX, in a note. "The result has seen the EUR gap 2 per cent higher from Friday's close as many now believe that supporters for Republican candidate and third place contender, Francois Fillon, will support Macron."

Global events will continue to drive the kiwi dollar this week, with little local economic news scheduled. Among events likely to be the focus of traders, US President Donald Trump has reportedly said the White House will unveil a "massive tax cut" but didn't give more details.

On Monday morning, the kiwi was trading at 92.85 Australian cents from A93.20c on Friday and at 54.72 British pence from 54.87p. It rose to 77.71 yen from 76.69 yen. The trade-weighted index was at 76.48 from 76.34 last week.

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