Currency markets witness notable movements amid political, economic developments
(MENAFN) Currency markets saw notable movements yesterday as political and economic developments influenced trading sentiments. The euro experienced a decline amidst indications that France's parliamentary elections might result in a hung parliament, adding uncertainty to the country's future fiscal and monetary policies. The euro fell by 0.1 percent to USD1.08235, with earlier drops reaching 0.4 percent as traders assessed the potential implications of political gridlock in France.
Meanwhile, the U.S. dollar continued its downward trend following weaker-than-expected U.S. jobs data released on Friday. This data reinforced market expectations of an impending interest rate cut by the Federal Reserve to stimulate economic growth. The dollar index, which gauges the dollar's strength against a basket of six major currencies, settled at 104.95, showing a slight recovery after a decline of about one percent the previous week.
In contrast, the British pound strengthened to a three-and-a-half-week high against the dollar, continuing its rally sparked by Labour's decisive victory in last week's elections, ending 14 years of Conservative rule. The pound rose to USD1.2820 earlier in the day, marking its highest level since June 12, before settling slightly lower at USD1.28105, reflecting fluctuating market sentiments amid ongoing political developments.
The Japanese yen also saw gains for the third consecutive day, rebounding from near a 38-year low against the dollar last week. These movements in major currencies underscored the complex interplay of political outcomes and economic data, shaping investor expectations and influencing currency trading dynamics globally.
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