Asia FX weak, dollar edges lower after Biden drops presidential bid

Investing.com– Most Asian currencies tread water on Monday as an unexpected interest rate cut in China offered little cheer, while the dollar crept lower after President Joe Biden said he will no longer seek reelection. 

Biden endorsed Vice President Kamala Harris, who is now likely to face off against Republican frontrunner Donald Trump in the presidential race. 

Biden’s move ramped up uncertainty over the upcoming presidential elections, which in turn soured sentiment towards risk-driven markets. This, coupled with concerns that a potential Trump presidency could also entail more clashes with China, weighed on regional currencies. 

Dollar edges lower amid political jitters, rate cuts in focus 

The dollar index and dollar index futures both fell 0.1% each in Asian trade, amid uncertainty over the U.S. political outlook.

Trump was seen polling ahead of both Biden and Harris, CBS data showed last week. Analysts expect a Trump presidency to potentially yield higher inflation, especially if he proceeds with stricter trade restrictions and higher import tariffs against China. 

But Harris is now expected to provide a greater challenge to Trump, especially as reports showed all state Democratic party chairs had endorsed Harris. Democratic fundraising also topped $50 million after Biden’s endorsement of Harris. 

The dollar had advanced last week amid speculation over the 2024 election. But gains in the greenback were still largely held back by increased bets that the Federal Reserve will begin cutting interest rates from September. 

This notion had battered the dollar in early-July, and also offered some relief to Asian markets. 

Chinese yuan near 8-mth low after surprise loan prime rate cut 

The Chinese yuan weakened on Monday, with the USDCNY pair rising 0.1% to 7.2729, nearly reaching levels last seen in November.

Weakness in the yuan came after the People’s Bank of China unexpectedly cut its benchmark loan prime rate to further loosen monetary policy and support the economy.

The cut comes as China struggles with a slowing economic recovery- concerns over which have added to mounting pressure on the yuan.

Recent weakness in the yuan also came amid concerns over a Trump presidency, given that Trump has maintained a negative rhetoric towards Beijing. 

Broader Asian currencies moved in a flat-to-low range, weighed by uncertainty over U.S. politics. The Japanese yen’s USDJPY pair was flat around 157.44 yen, after seeing wild swings last week amid suspected intervention by the government. 

The Australian dollar’s AUDUSD pair fell 0.2%, while the Singapore dollar’s USDSGD pair was flat.

The South Korean won’s USDKRW pair rose slightly, while the Indian rupee’s USDINR pair fell 0.1% after surging to record highs last week.

This post is originally published on INVESTING.

  • Related Posts

    Oil falls after Trump reverses Colombia sanctions threat

    By Anna Hirtenstein LONDON (Reuters) -Oil prices wavered on Monday after the U.S. and Colombia reached a deal on deportations, reducing immediate concern over oil supply disruptions but keeping traders…

    Dollar gains on tariffs fears; euro looks to ECB meeting

    Investing.com – The US dollar slipped lower Monday, rebounding after recent losses as attention returned to the potential for trade tariffs from the Trump administration at the start of a…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Exness Shuts Indian Registrations, Keeps Trading Open for Current Users

    • July 17, 2025
    Exness Shuts Indian Registrations, Keeps Trading Open for Current Users

    Why Do Forex Brokers Freeze Trades During Volatility?

    • July 17, 2025
    Why Do Forex Brokers Freeze Trades During Volatility?

    Over 55,000 Clients Affected in IT Transition Misstep; Saxo Hit With €1M Fine by French Regulator

    • July 17, 2025
    Over 55,000 Clients Affected in IT Transition Misstep; Saxo Hit With €1M Fine by French Regulator

    55,000 Clients Affected in IT Transition Misstep; Saxo Hit With €1M Fine by French Regulator

    • July 17, 2025
    55,000 Clients Affected in IT Transition Misstep; Saxo Hit With €1M Fine by French Regulator