The euro steadied against the dollar on Monday after surging to a five-month high overnight after French election results eased fears over the future of the euro zone, cheering investors.
Centrist former economy minister Emmanuel Macron edged out Marine Le Pen, leader of the far-right National Front party, in the first round of voting in the French presidential election race on Sunday.
Polls have indicated that Macron will comfortably beat Le Pen in the runoff vote on May 7, meaning that the risk of Frexit and the potential breakup of the euro zone has waned.
EUR/USD was at 1.0864 by 07.26 GMT after going as high as 1.0920 overnight, the most since November 11.
The dollar was sharply higher against the safe haven yen, with USD/JPY advancing 0.93% to 110.10, after hitting an earlier high of 110.52.
The euro was also higher against the Japanese currency, with EUR/JPY at 119.39 after earlier logging a one-month high of 119.94.
The stronger euro weighed on the dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies.
The index was down 0.69% to 98.97, but losses were held in check by the greenback’s gains against the yen.
Investors were also monitoring geopolitical developments, amid heightened tensions on the Korean peninsula.
North Korea said on Sunday it was prepared to sink a U.S. aircraft carrier conducting drills with Japanese destroyers near the Philippines in order to demonstrate its military might.
Markets were also eyeing events in Washington after President Donald Trump said Friday that a “big announcement” was coming this week on overhauling the U.S. tax code. The announcement will consist of “broad principles and priorities” an administration official said on Saturday.