March 5, 2018 / 5:28 PM / 10 months ago

FOREX-Euro stabilizes after German, Italian elections

    * Euro bounces after German vote, Italian parliamentary
    * Positioning in long euro bets still near record
    * Traders await U.S. jobs data; RBA, BOC, ECB, BOJ meetings

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 5 (Reuters) - The euro edged higher on
Monday after a short-lived sell-off tied to Italy's inconclusive
weekend election, helped by the  creation of a coalition
government in Germany that eased political uncertainty there.
    Italy's election, which pointed to prolonged political
jitters after right-wing and eurosceptic parties did better than
expected, was somewhat balanced by Germany's Social Democrats
agreeing to join with Chancellor Angela Merkel's conservatives,
ending a period of uncertainty in Europe's biggest economy.

    Taken together, the election outcomes did not to alter
investors' view on the strength of the euro zone economy,
although the Italian results put political risks in the region
back on the radar.
    "All in all, they are neutral to slightly positive for the
euro," said Nick Bennenbroek, head of currency strategy at Wells
Fargo Securities in New York.
    Bennenbroek and other analysts said traders will turn their
focus to four major central bank meetings this week as well as
the U.S. payrolls report due Friday.
    The Reserve Bank of Australia will meet on Tuesday, while
the Bank of Canada will hold a policy meeting on Wednesday.
European Central Bank policymakers will convene on Thursday,
while their counterparts at the Bank of Japan will meet on
    The euro was last up 0.09 percent to $1.2328. 
    The single currency rose to a two-week high at $1.2365 in
Asian trading after the German results. It quickly retreated by
0.8 percent towards the day's low at $1.2267 as results from
Italy pointed to a messier outcome than expected - a strong
showing for anti-establishment parties and no group able to form
a stable government.
    The euro was up 0.31 percent to 130.65 yen. It had fallen as
much as 0.7 percent to 129.37 yen, its lowest since late August
in early London trading.
    In an indicator of how sanguine currency markets were about
Italy's turmoil, risk reversals in currency derivatives markets
for euro/dollar were smaller than before France's
election verdict in May last year.
    Even latest positioning data showed euro bulls remained
upbeat, with net long currency positions still near record
bullish bets in early February.    
    More worryingly from the euro's perspective, recent data
showed that economic momentum has stalled in the euro zone,
indicating the single currency may be coming under some
pressure. A Citi economic surprise index for the currency bloc
 is at near six-month lows.
    The dollar steadied after wobbling last week on U.S.
President Donald Trump's proposed tariffs on imported steel and
aluminum, raising fears of a trade war.
    The greenback strengthened 0.23 percent at 106.00
yen. It hit a 16-month low of 105.23 yen on Friday.
    Currency bid prices at 12:17PM (1717 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.2329        $1.2317     +0.10%         +2.78%      +1.2365     +1.2270
 Dollar/Yen       JPY=        105.9700       105.7300    +0.23%         -5.95%      +106.0000   +105.3600
 Euro/Yen         EURJPY=     130.64         130.24      +0.31%         -3.36%      +130.7600   +129.3700
 Dollar/Swiss     CHF=        0.9394         0.9380      +0.15%         -3.58%      +0.9402     +0.9348
 Sterling/Dollar  GBP=        1.3852         1.3802      +0.36%         +2.52%      +1.3876     +1.3768
 Dollar/Canadian  CAD=        1.2976         1.2878      +0.76%         +3.17%      +1.2988     +1.2872
 Australian/Doll  AUD=        0.7757         0.7762      -0.06%         -0.56%      +0.7778     +0.7727
 Euro/Swiss       EURCHF=     1.1584         1.1550      +0.29%         -0.90%      +1.1598     +1.1512
 Euro/Sterling    EURGBP=     0.8897         0.8921      -0.27%         +0.16%      +0.8951     +0.8885
 NZ Dollar/Dolar  NZD=        0.7227         0.7243      -0.22%         +1.99%      +0.7255     +0.7204
 Dollar/Norway    NOK=        7.8201         7.7834      +0.47%         -4.71%      +7.8507     +7.7614
 Euro/Norway      EURNOK=     9.6420         9.5895      +0.55%         -2.10%      +9.6582     +9.5834
 Dollar/Sweden    SEK=        8.2512         8.2473      +0.10%         +0.60%      +8.2910     +8.2366
 Euro/Sweden      EURSEK=     10.1730        10.1629     +0.10%         +3.39%      +10.1905    +10.1480
All spots FX= 
Tokyo spots AFX= 
Europe spots EFX= 
Volatilities FXVOL= 
Tokyo Forex market info from BOJ TKYFX World central bank news
Economic Forecasts... ECON   Official rates...INT/RATE
Forex Diary.......MI/DIARY   Top events........M/DIARY
Diaries...........DIARY Diaries Index........IND/DIARY
Press Digests.....PRESS Polls on G7 economies..SURVEY/
European markets......MARKETS/))

 (Reporting by Richard Leong in New York and Saikat Chatterjee
in London
Editing by Andrea Ricci)
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