EUR/USD Stabilizes Above 1.0800, With Focus On US Non-Farm Payrolls & French Election

EUR/USD hit a three-week high near 1.0830 during the European session on Friday. The pair strengthened on the improved outlook for the euro ahead of the second round of French elections scheduled for Sunday, combined with a weaker U.S. dollar (USD).

The euro’s appeal has increased as French President Emmanuel Macron’s Accession Alliance and the Left League strategically withdrew at least 200 candidates from Sunday’s legislative elections, raising expectations that Marine Le Pen’s far-right National Rally will not be able to convert its victory in the first round into an outright majority.

Meanwhile, speculation has diminished about a follow-up rate cut by the European Central Bank (ECB) on July 18 as deflation in the eurozone appears to be stalling. The preliminary index of core consumer prices (HICP), which strips out volatility, rose steadily by 2.9% year-on-year in June.

On Friday, investors will await eurozone retail sales data for May, due at 17:00 GMT. Retail sales contracted 0.5% in April and are expected to rise 0.2% in May. On an annual basis, retail sales are expected to edge up 0.1% after being unchanged in April.

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