Investing.com – The US dollar stabilized in early European trading on Monday, giving back some of the gains recorded after the attempted assassination of former US President Donald Trump this weekend, ahead of Fed Chairman Jerome’s comments Powell.
At 05:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading largely unchanged at 103.785, after hitting a one-month low last week.
Dollar Stabilizes Ahead of Powell Speech
The dollar and the benchmark initially gained after Trump’s right ear was hit, causing his face to bleed, after shots rang out at a campaign rally in Pennsylvania last weekend.
Trump will now appear at the 2024 Republican convention later this week and will likely be nominated as the party’s frontrunner for the presidential race.
Analysts said the shooting boosted his chances of a victory over Joe Biden – a scenario that could ultimately benefit the dollar as Trump has signaled his intention to pursue more protectionist trade policies.
However, these gains disappeared before the comments of Federal Reserve Chairman Jerome Powell, who is about to be interviewed by David Rubenstein at the Economic Club of Washington DC.
US inflation showed signs of easing last week, and Powell could increase expectations that the central bank will start a rate-cutting cycle in September.
“Fed speakers will need to comment on the latest CPI numbers, and compared to June’s Dot Plot, there are clear risks of mild adjustments in communications from many FOMC members,” ING analysts said in a note.
Euro wins in the run-up to ECB meeting
rose 0.1% to 1.0910, with the euro trading at its highest level since March, ahead of the European Central Bank’s latest policy-setting meeting later this week.
The ECB is widely expected to maintain its current interest rates after easing them in June.
“The softer dollar story has given EUR/USD a boost in July – but we still think the volatile situation in French politics is a risk that cannot be ignored, and in any case suggests that the euro should The USD sell-off lags behind most other procyclical currencies. ,” said ING.
Credit rating agencies Moody’s (NYSE:) and S&P Global have warned of negative consequences for the French economy due to the political deadlock, with no political party gaining an outright majority in the recent parliamentary elections.
traded marginally lower at 1.2988, trading near its highest level in over two years, in the wake of the landslide election victory for Britain’s centre-left Labor government, with investors beginning to view UK markets as a potential haven as political uncertainty will increase in the coming years. the US and elsewhere in Europe.
The yuan fell after weak Chinese GDP data
In Asia, it traded 0.1% higher at 157.96, with the yen falling slightly after rising sharply against the dollar late last week. This led to speculation as to whether this move was caused by government intervention or a short squeeze on bets on the yen.
traded 0.2% higher to 7.2627, with the Chinese currency weakening near an eight-month low after China’s economy grew less than expected at 4.7% in the second quarter amid mounting headwinds from weak consumer spending.
