FOREX-Euro holds steady after EU vote shows pro-Europe parties cling to majority

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* Pro-EU parties fragmented, but cling to majority inelection

* Euro off 2-year low, sterling little moved

* Yen flat, Trump sees Japan trade deal after July elections

By Hideyuki Sano

TOKYO, May 27 (Reuters) - The euro barely budged in earlyMonday trade after pro-European Union parties held on totwo-thirds of seats in the EU parliament elections, limitinggains in nationalist opponents.

The common currency was little changed at $1.1210EUR= inAsian trade and off a two-year low of $1.11055 touched onThursday, as the markets studied the outcome of the vote.

While centre-right and centre-left blocs are losing theirshared majority, surges in the Greens and liberals meant partiescommitted to strengthening the union held on to two-thirds ofseats, official projections showed. urn:newsml:reuters.com:*:nL5N2310EJ

The results dented the hopes of anti-immigration,anti-Brussels National Rally led by Marine Le Pen, ItalianDeputy Prime Minister Matteo Salvini and others who have beenopposing attempts to forge closer EU integration.

"The focus is on how each government will react and how theBrexit negotiations will play out after this elections. So farwe've seen limited market reaction as far-right, populistparties didn't do as well as some had feared," said Shin Kadota,senior FX and rates strategist at Barclays.

Trading was seen subdued on Monday due to market holidays inLondon and New York.

The dollar was little changed against other currencies.

The U.S. currency traded at 109.35 yenJPY= , not far froma three-month low of 109.02 touched two weeks ago, hit amidworries about escalating tensions between Washington and Beijingover trade and technology.

The dollar has been also capped against the yen as U.S.President Donald Trump is seen putting pressure on Japan to takemeasures to reduce its trade surplus with the United States.

Trump, who arrived in Tokyo on Saturday, tweeted on Sundaythat much of the trade negotiation with Japan will wait untilafter the country's election in July. urn:newsml:reuters.com:*:nL4N232050

The British pound was steady at $1.2725GBP=D4 , havingregained some ground after Prime Minister Theresa May set out adeparture date, bouncing back from a 4-1/2-month low of $1.2605set on Thursday.

But the prospect of a "no deal" Brexit was fast becoming thecentral battle of the race among contenders to succeed May, withfour of eight leadership hopefuls having said Britain must leavethe EU on Oct. 31 even if this means a no-deal Brexit. urn:newsml:reuters.com:*:nL8N2320QM (Editing by Shri Navaratnam) ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; ReutersMessaging: hideyuki.sano.thomsonreuters.com@reuters.net))

This article appears in: Stocks , World Markets , Politics
Referenced Symbols: EUR

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