The euro rose on Monday as markets focused on European Central Bank tools to fight fragmentation in the currency bloc, shrugging off the risk of political gridlock in France for now after President Emmanuel Macron lost an absolute majority in a parliamentary election, APA reports citing Reuters.
Macron's Ensemble alliance secured the most seats in the National Assembly but fell well short of the absolute majority needed to control parliament, final results showed.
Analysts and traders looked past the election result to focus instead on the ECB's attempts to contain borrowing costs in the bloc's south and the global monetary policy outlook.
"Even though a Macron presidency and majority in parliament would be very positive for euro zone cooperation and so forth, it's more for the long term, it's not something that affects markets here and now," said Ingvild Borgen Gjerde, FX analyst at DNB Markets.
"There's two things that are very important to the euro: What sort of anti-fragmentation tool the ECB can come up with, and the outlook for monetary policy."
ECB President Christine Lagarde reaffirmed on Monday plans to raise the ECB's interest rates twice this summer while fighting widening spreads in the borrowing costs of different euro zone countries.
The euro was last up 0.4% against the dollar at $1.05365.
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