Investing.com - The euro hit fresh five-month highs against the dollar on Tuesday after a rally triggered by the first-round results of the French presidential election, while the safe haven yen weakened in risk-on trade.
EUR/USD was up 0.56% to 1.0929 by 10.45 ET, the highest level since November 11 after centrist former economy minister Emmanuel Macron won the first round of French presidential elections over the weekend.
Polls, which were largely accurate in predicting the first round result, have indicated that Macron will comfortably beat far right candidate Marine Le Pen in the runoff vote on May 7, easing concerns over the prospect of a French exit from the euro zone.
The dollar rose to two-week highs against the yen, with USD/JPY rising 0.69% to 110.53.
The stronger euro weighed on the dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, sending it to a one-month trough of 98.72.
Investors were eyeing events in Washington ahead of a looming deadline to avoid a government shutdown as they awaited more detail of a plan to overhaul tax from President Donald Trump.
Trump said last week that he would make an announcement about "a big tax reform and tax reduction" on Wednesday.
Trump has also indicated that he is flexible about waiting to secure funding for his promised border wall with Mexico, in a shift that could clear the way for lawmakers to reach a deal to avoid a government shutdown on Saturday.
Figures released on Tuesday showed that U.S. new home sales rose to an eight month high in March, increasing 5.8% to a seasonally adjusted annual rate of 621,000.
In other U.S. data, consumer confidence fell more than expected in April, partly due to concerns about the jobs market.
Sterling pushed higher against the dollar, with GBP/USD ticking up 0.2% to 1.2819.
Meanwhile, the Canadian dollar fell to the lowest levels in fourteen months amid concerns over an escalating dispute with the U.S. over the terms of the North American Free Trade Agreement.
The U.S. Commerce Department said Monday it will impose import duties ranging from 3% to 24% on Canadian softwood lumber imports.
USD/CAD touched a session high of 1.3614, the strongest level since February 25 2016, and was last at 1.3601, up 0.73% for the day.