Euro Rises Against Yen, Steady vs Dollar as French Rating Relief Eases Pressure Ahead of Central Bank Meetings

The euro rose against the safe-haven yen and held steady against the dollar on Monday, as falling oil prices and an unchanged French credit rating eased pressure on the single currency ahead of a busy week of central bank meetings. The euro was flat at $1.1201 and up 0.37% at 176.15 versus the yen, while the dollar index rose 0.05% to 101.83. French government bond (OAT) prices rose after Moody's spared France a credit rating downgrade last week. The yield gap between OATs and safe-haven Bunds tightened to 160 basis points after reaching 176 bps last week, the highest since 2011. Barclays strategists cautioned that French stress is unlikely to fade before the April/May presidential election. Five major central banks announce policy decisions this week. The Fed, ECB and Bank of Japan are all expected to hold rates steady while leaving the door open for December hikes. The Brazilian real was set to fall sharply after President Luiz Inacio Lula da Silva won a fourth term on Sunday, defeating Senator Flavio Bolsonaro.