>Analysis:
The recent news of President Joe Biden’s decision to end his re-election campaign has led to a weakening of the U.S. dollar, with the euro benefiting despite its own challenges. The Dollar Index has dropped 0.2% to 103.942, reversing its gains from last week. The uncertainty surrounding Biden’s potential replacement, Vice President Kamala Harris, has caused investors to shift their focus to the upcoming Democratic National Convention and how Harris may fare against Donald Trump in the polls.
On the other hand, the euro has bounced back after the European Central Bank’s decision to keep rates steady at its last meeting. Market analysts are still expecting a rate cut in September, which could impact the euro’s performance in the near future. Additionally, the British pound has strengthened following the Labour Party’s election victory, signaling a potential shift in Brexit-related risks and the UK’s economic outlook.
Overall, the political developments in the U.S. and Europe, as well as upcoming economic data releases, will continue to impact currency markets and investor sentiment. Traders should closely monitor key events and policy decisions to navigate potential risks and opportunities in the forex market.