The euro hit a six-month high against the dollar on Monday after Emmanuel Macron won the French presidential election, easily beating anti-EU rival Marine le Pen.
Overnight, the euro traded as high as $1.1024, its highest level against the dollar since November last year. It also briefly hit its highest level against Japan’s yen in about a year.
But the single currency eased throughout the day, ending down 0.62 per cent against the dollar at $1.0927 by late afternoon.
"The euro couldn't sustain the rally as it took to consolidating a 3 percent spike since France's presidential vote started two weeks earlier," said Joe Manimbo, a market analyst at Western Union Business Solutions in Washington.
"Nevertheless, the euro appears to have emerged from the French vote with a relatively bullish bias as dissipating political risk should intensify the spotlight on the [European Union] bloc's improving economic prospects."
"The results came in as expected and the market had already factored that in," said Andre Bakhos, managing director at Janlyn Capital in New Jersey.
During her campaign, Ms Le Pen had boasted that France would follow the triumphant populist path of Brexit and the presidency of Donald Trump in the US.
In stock markets, Japan’s Nikkei gained more than 2.31 per cent overnight, helping it to its highest level in around one and half years.
But stocks fell in mainland Europe. France's CAC index closed down 0.91 per cent and Germany's Dax ended 0.18 per cent lower.
The Stoxx 600 index of leading European shares was down 0.13 per cent.
The FTSE 100 was up 0.05 per cent.
In the US the Dow Jones Industrial Average and the S&P 500 both opened flat on Monday.
“Emmanuel Macron’s victory over Marine Le Pen had been widely anticipated, as the polls predicted a comfortable lead for Macron in the aftermath of the first round,” said Anna Stupnytska, a global economist at Fidelity International.
Nonetheless, she added that the result is “certainly positive for markets, removing a major source of uncertainty that had dominated investors’ minds over the past few months”.
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