The euro pared gains against the dollar on today but remained supported above the $1.17 level as signs of strength in the U.S. economy offset concerns over escalating trade frictions and political tensions in Italy.
EURUSD was up 0.52% at 1.1720 by 14:11 GMT, after rising as high as 1.1745 earlier.
The euro gained as concerns over the political situation in Italy subsided after anti-establishment parties reached a deal on a proposed coalition government, which eased fears that repeat elections could give a mandate for the country to exit the euro zone.
Traders shrugged off concerns over escalating global trade tensions as the improved political situation in the euro area and Friday’s upbeat U.S. jobs report continued to underpin risk appetite.
Data on Friday showed that U.S. jobs growth gained momentum and wage growth rose in May, cementing expectations for a June rate hike by the Federal Reserve and adding to bets for a fourth rate hike this year.
Trade tensions flared up again after finance ministers from the world’s leading economies criticized the Trump administrations new tariffs on steel and aluminum imports at a G7 meeting in Canada over the weekend.
Meanwhile, weekend talks between the U.S. and China on trade ended without a breakthrough, raising the danger that negotiations could collapse.
The dollar was almost unchanged against the safe haven yen, with USDJPY last at 109.54, holding below an overnight high of 109.77.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.37% to 93.81 as the stronger euro weighed.
The pound was a touch higher against the dollar, with GBPUSD edging up to 1.3361 by 13:00 GMT.
The risk sensitive Australian dollar was higher, with AUDUSD advancing 1.10% to trade, while the New Zealand dollar was also higher, with NZDUSD climbing 0.82% to 0.7041.