The euro steadied on Tuesday, pausing after a rally sparked by the first-round results of the French presidential election, while the Canadian dollar fell after the U.S. slapped duties on Canadian softwood lumber.

The euro last traded at $1.0866, off Monday's peak of around $1.0940, its highest level since Nov. 10, after centrist Emmanuel Macron won the first round of the French presidential elections.

Polls show Macron defeating anti-EU, anti-euro nationalist Marine Le Pen in a runoff vote due to take place next month.

The euro's sharp bounce on Monday was partly due to the triggering of stop-loss buying at $1.09, said Tan Teck Leng, forex analyst for UBS Wealth Management in Singapore.

After that rally, lingering caution over the risk of a surprise win by Le Pen in the runoff vote will probably limit the euro's gains for now, he said.

"Our view on the euro/dollar is that between now and May 7, you'll probably be trading between $1.08 and $1.10," Tan said.

Opinion polls indicate that the business-friendly Macron, who has never held elected office, will take at least 61 percent of the vote against Le Pen after two defeated rivals pledged to back him to thwart her eurosceptic, anti-immigrant platform.

The Canadian dollar fell 0.4 percent after U.S. Commerce Secretary Wilbur Ross said his agency will impose new anti-subsidy duties averaging 20 percent on Canadian softwood lumber imports.

The loonie slipped to C$1.3560 per U.S. dollar at one point, its lowest level since late December when it sank to C$1.3598.

YEN SLIPS

The U.S. dollar rose 0.3 percent to 110.08 yen, as the safe haven yen edged lower.

There was little market reaction after media reports said North Korea put on a massive live-fire drill on Tuesday.

Market participants have been worried that North Korea could conduct its sixth nuclear test, or another long-range missile launch, to coincide with the 85th anniversary of the foundation of its army on Tuesday.

Analysts said there was some relief for now, over the lack of such action by North Korea.

 

source - http://www.reuters.com/article/global-forex-idUSL4N1HX1HD

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