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22/07/24
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USD Gains Slightly on Safe-Haven Bids After Biden Ends His Campaign
On Monday, the U.S. dollar was up slightly as it captured some safe-haven flows, as investors evaluated U.S. President Joe Biden’s decision to step down from his re-election campaign, which will likely increase volatility in currency markets.
Investors also focused on the crucial monetary policy meetings of the Federal Reserve next week, which may indicate when the first interest rate cut may be, and the Bank of Japan, which may hike interest rates.
Investors have however been focused on the U.S. presidential race.
On Sunday, Biden announced he was stepping down from the race, endorsing Vice President Kamala Harris to replace him as the Democratic candidate in the election in November.
Harris soon received the backing of many Democrats, although several high-profile names remained quiet, including former U.S. President Barack Obama and former House of Representatives Speaker Nancy Pelosi.
The Republican nominee, former President Trump, is well ahead in betting markets.
The U.S. dollar index, which measures its strength against 6 other major currencies, was 0.1% higher at 104.3.
BofA’s head of global forex research, Athanasios Vamvakidis, said due to tax cuts and tariffs there was increasing consensus that the dollar would be stronger if Trump wins.
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