EUR Weakness Follows EU Elections, USD Supported Elsewhere

USD strength has carried over from Friday's session into the first part of Monday trade. The BBDXY index is up a further 0.20%, last tracking around 1265.3. This puts the index back close to early May levels.

• EUR/USD weakness was evident from early trading, as weekend parliamentary elections showed firm support for right-wing parties and placed fresh clouds over the French near term outlook. Legislative elections were called for the end of this month by President Macron following his party's poor results from the Sunday elections.
• The currency is tracking to fresh lows near 1.0750 in recent dealings, off a further 0.4% so far today. We are below key short term support (1.0788, May 30 low), with 1.0724 (the May 9 low) a potential downside target.
• Yen initially outperformed EUR, but is also tracing weaker. USD/JPY is back to 157.10/15, firmer by 0.25%. May 29 highs at 157.71 is a key upside focus point. We had Q1 GDP revisions data out earlier, but there weren't any major shifts relative to the initial print (q/q growth remained at -0.5%).
• US yields have ticked higher, lending some further support to USD/JPY. Regional equity sentiment is mixed. Japan stocks are the main positive.
• AUD/USD is a little higher, but still sub 0.6590. Australian markets have been closed today, while China and Hong Kong markets are also out. NZD/USD is close to 0.6100, little changed for the session.
• Looking ahead, it is a relatively quiet start to the week data wise.