SYDNEY (REUTERS) - The euro briefly vaulted to five-month peaks on Monday (April 24) after the market's favoured candidate won through the first round of the French election, reducing the risk of a Brexit-like shock and sparking a mass unwinding of safe-haven trades.

Investors had feared for the single currency's future if one of the far-left candidates had gotten through to fight Le Pen. The euro jumped in relief, and was last up 1.1 per cent at US$1.0845, having been as far as US$1.0940, the highest since early November.

Against the Singapore dollar, the euro was up 1.2 per cent to S$1.5131 at 12:05pm, from its close last Friday at S$1.4953.

The safe-haven yen slipped across the board with the euro surging 2 per cent to 119.32 yen while the US dollar gained 0.9 per cent to 109.99 yen. Likewise, gold fell 0.7 per cent to US$1,274.70 an ounce.

"The rise of the euro and risk appetite rebounding is understandable and this should also see yields in Europe fall, spreads to Bunds tighten and stocks rally," said Tim Riddell, an analyst at Westpac. "However, such gains are likely to be contained when markets reflect upon the marked shift away from the "establishment" and just how effective the new president may be," he added.

Japan's Nikkei jumped 1.3 per cent as the yen retreated, while MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 per cent.

Shanghai shares, however, fell 1.5 per cent after state media signalled Beijing would tolerate more market volatility as regulators clamp down on riskier financing.

E-mini futures for the S&P 500 climbed 0.8 per cent in early trade, while yields on 10-year US Treasury notes rose almost 8 basis points to 2.31 per cent.

In France, Centrist Emmanuel Macron took a big step toward the presidency on Sunday by winning the first round of voting and qualifying for the May 7 runoff alongside far-right leader Marine Le Pen.

The outcome lessens the risk of an anti-establishment shock on the scale of Britain's vote to quit the European Union with Macron widely tipped to win the final vote and keep France in the union.

Opinion polls put Macron ahead by over 20 points, a lead so large that a repeat of the Brexit surprise seemed highly unlikely.

Investors had feared for the single currency's future if one of the far-left candidates had gotten through to fight Le Pen. The euro jumped in relief, and was last up 1.1 per cent at US$1.0845, having been as far as US$1.0940, the highest since early November.

The safe-haven yen slipped across the board with the euro surging 2 per cent to 119.32 yen while the US dollar gained 0.9 per cent to 109.99 yen. Likewise, gold fell 0.7 per cent to US$1,274.70 an ounce.

"The rise of the euro and risk appetite rebounding is understandable and this should also see yields in Europe fall, spreads to Bunds tighten and stocks rally," said Tim Riddell, an analyst at Westpac. "However, such gains are likely to be contained when markets reflect upon the marked shift away from the "establishment" and just how effective the new president may be," he added.

Wall Street on Friday had only a modest lift from news President Donald Trump would announce the broad outline of his proposed tax package on Wednesday.

"Markets are sceptical that the real details will be forthcoming," said analysts at ANZ in a note. "There is also plenty of conjecture about whether any tax cuts will be able to be revenue neutral, and that could affect their ease of passage through Congress."

The Dow ended Friday down a minor 0.15 per cent, while the S&P 500 lost 0.30 per cent and the Nasdaq fell 0.11 per cent.

Investors were also keeping a wary eye on tensions in the Korean peninsula.

North Korea said on Sunday it was ready to sink a US aircraft carrier to demonstrate its military might, in the latest sign of rising tension as Trump prepared to call the leaders of China and Japan.

South Korea responded by asking Washington about holding joint drills with the USS Carl Vinson aircraft carrier strike group as it approaches waters off the Korean peninsula.

Oil prices recouped just a little of last week's hefty losses, still weighed by signs US production and inventory growth were offsetting OPec's attempts to reduce the global crude glut.

Brent futures were up 29 cents at US$52.25 a barrel, while US crude futures added 24 cents to US$49.86.

With additional information from The Straits Times