The dollar index (DXY00) on Monday fell slightly by -0.08%. The dollar was undercut by US political uncertainty and reduced liquidity demand due to the rally in stocks. The dollar saw underlying support from the +1.6 bp rise in the 10-year T-note yield to 4.255%, which supported the dollar’s interest rate differentials.
US political uncertainty rose after President Biden dropped out of the presidential race on Sunday and endorsed Vice President Harris. The markets will be watching to see how quickly VP Harris can wrap up the nomination as the Democratic presidential candidate and how she polls against Mr. Trump once she becomes the nominee.
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