Investing.com - The dollar edged higher against other major currencies on Friday, but gains were capped as markets were still digesting Thursday’s Paris terrorist attack and gearing up for the first round of France’s presidential election amid ongoing U.S. political uncertainties.
EUR/USD slipped 0.23% to 1.0690, off the previous session’s nearly one-month peak of 1.0721.
A French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack claimed by the Islamic State.
Market participants were eyeing the first round of the French presidential election due on Sunday, as recent polls have forecast the most likely outcome to be centrist Emmanuel Macron against far-right candidate Marine Le Pen.
Earlier Friday, research group Markit said its flash euro zone composite purchasing manager’s index, which measures the combined output of both the manufacturing and service sectors increased to a six-year high of 56.7 in April from 56.4 last month, beating forecasts for a drop to 56.3.
Meanwhile, the greenback mildly recovered from recent losses after U.S. Treasury Secretary Steven Mnuchin said on Thursday that the administration will unveil a tax reform plan very soon, easing doubts over whether President Donald Trump will be able to pass tax reforms in the near term.
But sentiment on the dollar remained vulnerable after North Korean state media warned the U.S. earlier in the week of a "super-mighty preemptive strike" and said don't "mess with us."
Elsewhere, GBP/USD fell 0.28% to 1.2777 after the U.K. Office for National Statistics said retail sales slumped 1.8% in March, confounding expectations for a 0.2% slip. Year-on-year, retail sales increased 1.7% last month, compared to forecasts for a 3.4% rise.
But the pound’s losses were limited since U.K. Prime minister Theresa May on Tuesday called a snap election for June 8.
USD/JPY edged down 0.19% to trade at 109.12, while USD/CHF held steady at 0.9988.
The Australian and New Zealand dollars turned moderately lower, with AUD/USD down 0.13% at 0.7519 and with NZD/USD easing 0.10% to 0.7003.
Meanwhile, USD/CAD held steady at 1.3472, not far from Thursday’s six-week high of 1.3501.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% at 99.87, the highest level since Tuesday and away from Thursday’s three-week low of 99.29.