The euro has recovered early losses today after election results handed a significant share of the EU parliament to Eurosceptics but has failed to deliver the serious domestic blow to some European governments feared by some analysts.

With UK and US markets closed for the holidays, volumes were as low as 80 percent of daily averages, an environment which can often make for volatile moves in pricing.

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The euro blipped higher soon at the start of Euro trading, but was still up only 0.03 percent at 1.3637. The dollar, traded at 80.443 just off a 7-week high against a trade-weighted basket of currencies.

With little immediate reaction to comments by European Central Bank President Mario Draghi ahead of a meeting next week expected to take steps to ease monetary policy further and boost growth.

“There does look like a bit of a risk on mood today and you could ascribe the euro’s moves to that,” said a trader with one of the Scandinavian banks.

“But it is only 20 pips and the euro has been heading lower for quite some time. It may well just be some people have taken the chance to take some profit.”

The elections saw critics of the European Union more than double their seats in a protest vote against austerity and unemployment, but Italian bond prices rose as Prime Minister Matteo Renzi looked set to outstrip the country’s anti-establishment 5-Star Movement.

Greek 10-year yields were 34 basis points lower at 6.19 percent after the anti-austerity Syriza movement of Alexis Tsipras won the vote but failed to deliver a knockout blow to the government of Prime Minister Antonis Samaras.

Elsewhere there were stunning victories for nationalist parties in Britain and France.

“Of course the French government will try and avoid any painful reforms even more so than before now. And the fact that the Greek government has no backing amongst the population was confirmed impressively by the election result,” said Ulrich Leuchtmann, head of global FX research with Commerzbank in Frankfurt.

“However, in the end the reasons behind euro purchases are unlikely to have been hopes for reform in France or the political stability in Greece. As a result the outcome of the election is not an event that should affect the FX market.”

The euro has fallen more than 2 percent against the dollar since May 5 against a backdrop of rising expectations that the ECB will further ease returns for holding the common currency next month.

Data from the Commodity Futures Trading Commission published on Friday for the week ended May 20 showed speculators raised their net short positions in the euro to 9,220 contracts from 2,175 contracts the previous week. Source: Reuters