By Chibuike Oguh
NEW YORK, Oct 26 (Reuters) - The euro fell against the dollar on Monday ahead of a busy week of central bank meetings and with crude oil prices remaining elevated, while the Brazilian real tumbled following a surprise election victory by President Luiz Inacio Lula da Silva.
The euro was pressured last week as a selloff in French government bonds drove the country's debt risk premium to its highest level since the 2011 sovereign debt crisis, reigniting concerns about renewed financial
stress across the euro zone.
However, French government bond (OAT) prices rose on Monday after Moody's spared France a credit rating downgrade last week, easing pressure on a government struggling to shore up strained finances.
The euro was down 0.23% against the dollar at $1.1201 but up 0.39% at 176.18 versus the yen.
"The fundamental issue with the euro hasn't changed and spreads have tightened," said Kit Juckes, chief global FX strategist at Societe Generale. "Euro is still vulnerable at this point because the growth outlook isn't good and energy prices are still elevated."
Brent crude futures eased but still held near six-month highs. Elevated oil prices weigh on import-dependent economies such as the euro zone. Brent fell 0.52% to $116.14 per barrel.
The dollar has been supported by resilient US economic indicators, notwithstanding headwinds including rising inflation. The US currency came under selling pressure during a tech-led market selloff last week.
Five major central banks will announce policy decisions later in the week. The US Federal Reserve, the European Central Bank and the Bank of Japan are all expected to hold rates steady despite inflation pressures.
New Zealand's and Canada's central banks are expected to raise rates this week.
The Japanese yen fell 0.48% to 157.56 per dollar.
The dollar index, which measures the US currency against a basket of peers, was up 0.34% at 102.02.
"The dollar is doing less well than expected and has some headwinds but US economic data has been pretty resilient," Juckes said.
REAL TUMBLES
The Brazilian real fell sharply against the US dollar after Lula won a historic fourth term on Sunday against Senator Flavio Bolsonaro, who is also the eldest son of former President Jair Bolsonaro.
Bolsonaro led the election's first round but lost in the runoff by over 4 million votes, rattling Brazilian financial markets, which had bet on his victory. He has refused to concede defeat and promised to ask for the result to be annulled.
The real was down 9% at 5.4255 per dollar.
(Reporting by Chibuike Oguh in New York Stefano Rebaudo; Editing by Nia Williams)
