Relief swept through European financial markets yesterday after centrist Emmanuel Macron made it into the run-off for the French presidency, sending the euro to its highest level against the dollar in five months and shares in French banks soaring.

French government bond prices also rallied, with the difference in annual French and German borrowing costs on 10-year sovereign bonds — a closely watched indicator of market sentiment — falling to below 50 basis points for the first time since late January.

Investors said Mr Macron’s victory in Sunday’s first round, with 23.8 per cent of the vote, ensured a candidate with a mainstream economic reform agenda would take on — and be likely to defeat — Marine Le Pen, the rightwing populist urging euro exit.