(Bloomberg) -- The euro rose versus most G-10 peers as traders appeared to trim bearish bets after a debate between the two French presidential candidates had little impact on polls showing centrist Emmanuel Macron leading before the final round of voting Sunday. The dollar reversed overnight gains.
A round of euro-area PMI indexes that surpassed estimates, signaling strengthening in the local economy, further supported the euro. Meanwhile, the Bloomberg dollar spot index declined amid muted trading flows as investors kept their powder dry before the April nonfarm payrolls report due 8:30am ET Friday.
The euro traded near session highs, with the Bloomberg euro spot index advancing 0.8 percent, reaching the strongest since November. After an acrimonious TV debate Wednesday, Macron is still seen holding a solid lead over far-right candidate Marine Le Pen.
Traders expect that the euro will see choppy trading again at the start of next week after the French voting result, with some saying a Macron victory may spur a relief rally that carries the euro to 1.1000 or beyond, at least briefly.
U.S. data Thursday saw a steeper-than-expected drop in weekly jobless claims, which may factor into traders' calculations for Friday's non-farm payrolls release. The median estimate in a Bloomberg survey of economists calls for job gains of 190,000 in April, after the prior month's disappointing 98,000 reading. ADP Institute data this week appeared to confirm a steady employment picture. Traders will pay closer than usual attention to revisions in the government data, given last month's miss.
- EUR/USD is trading at 1.0977, near a session high of 1.0979, the strongest since Nov. 9. Offers to sell the euro are in place at 1.0980 and likely also near 1.1000 where a large option expiry rolls off Friday, traders said
- USD/JPY fell back from a fresh high at 113.05, dropping to 112.32 despite the yield on the 10-year Treasury climbing to 2.3667%. Offers and technical resistance above 113.00 capped gains, after the dollar rose as much as 1.7% since the start of the week. USD tripped stop-loss sell orders below 112.50 and below 112.40, trader in New York said.
- The dollar has declined versus a handful of G-10 peers, and the Bloomberg dollar spot index has dropped 0.1 percent.
To contact the reporters on this story: Alexandria Arnold in Seattle at abaca3@bloomberg.net, Dennis Pettit in New York at dpettit5@bloomberg.net.
To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net, Mark Tannenbaum
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