Swiss bank Credit Suisse warns that the eurozone could collapse in case of a European recession
The euro tumbled to its lowest level against the dollar in almost a year on Friday 18 November 2016 Getty

The euro began the week on the front foot, halting a 10-day losing streak against the US dollar and gaining ground against the pound, despite the ongoing political turmoil in the Eurozone.

Having touched its lowest level against the dollar in almost a year on Friday (18 November), the common currency recouped some of the losses and was trading 0.54% higher against the greenback to $1.0645 by mid-afternoon on Monday.

The gains followed Angela Merkel's decision to run for a fourth term as German chancellor, and Francois Fillon's sudden promotion to favourite to become the next French president. The latter's emergence looks to have momentarily halted the hopes of National Front leader, and notorious eurosceptic, Marine Le Pen to secure the presidency in April.

However, Kit Juckes, head of forex at Societe Generale, warned against drawing premature conclusions.

"The clearest message I received over the last two weeks was that opinion polls and historical voting patterns which suggest a Le Pen victory is unlikely, won't do much to ease pre-election nervousness," he said.

"Market participants can see the shift in the voter mood and the sharp swing in support for Fillon can be seen as yet another surprise for opinion pollsters. Uncertainty will weigh on the Euro for months to come."

However, the euro failed to record a significant advance against the pound, as the latter climbed 0.58% to €1.1713 after briefly dipping to €1.1578 earlier in the day. The British currency was also on the front foot against the dollar, climbing 0.45% to $1.2400.

"In a quiet week for UK domestic releases, Thursday's estimate of third quarter economic growth will be the pound's primary driver," explained Chris Saint, senior analyst at Hargreaves Lansdown Currency Service.

Elsewhere, the dollar suffered losses against its major rivals. The greenback fell 0.16% and 0.18% against the yen and Swiss Franc, exchanging hands at ¥110.73 and CHF1.0082 respectively, and tumbled 0.58% and 0.63% respectively against its Canadian and Australian counterparts to CAD$1.3426 and AUD$1.3567.