On Monday, the U.S. dollar experienced a slight decline following President Joe Biden’s announcement of his withdrawal from the 2024 presidential race, setting the stage for another Democratic candidate to challenge former President Donald Trump.
In early Asian trading, the dollar fell by 0.08% to 157.38 yen. Conversely, the euro saw a marginal increase of 0.11%, reaching $1.0895.
Biden’s decision, made public on Sunday, included an endorsement of Vice President Kamala Harris as his successor for the Democratic nomination in the upcoming election.
Former President Trump, the leading Republican contender, is currently favored in betting markets, buoyed by Biden’s lackluster debate performance last month and mounting concerns over his cognitive abilities.
Joseph Capurso, a strategist at the Commonwealth Bank of Australia, cautioned against drawing significant conclusions from the dollar’s immediate reaction. He emphasized that the real determinant would be the outcome of upcoming polls, suggesting that a shift in Trump’s chances could influence the dollar’s strength.
“While Harris may be a formidable candidate, it remains to be seen if she can substantially alter the current polling dynamics,” Capurso remarked.
In other currency movements, the British pound rose by 0.15% to $1.2931, and the Australian dollar increased by 0.08% to $0.6691.
The Chinese yuan held steady at 7.2881 per dollar in offshore trading. This stability followed a decision by the People’s Bank of China to reduce the seven-day reverse repo rate from 1.8% to 1.7%, aimed at enhancing market operations and supporting the real economy.
