Dollar edges lower, Asian stocks slip following Biden’s election exit
dollar slipped and Asian stocks fell after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris. China’s central bank cut a key short-term interest rate.
A Bloomberg gauge of the US currency’s strength fell 0.2% Monday after the US President bowed to pressure from the Democrats and pulled out of the November election race, while the Mexican peso climbed. US stock futures gained.
Stocks opened lower in Japan and South Korea, adding to weakness in Australia. Futures for Hong Kong equities pointed to a steady open. The People’s Bank of China said it will lower the seven-day reverse repo rate to 1.7% from 1.8%, in a move that supports the economy and marks a step toward making the rate the new policy benchmark.
Investors have mulled for weeks a greater prospect Trump will win the November election following Biden’s weak debate performance, only for bets on a Trump win to accelerate last week following an assassination attempt on the former president. The dollar rose for the first time in three weeks, while emerging market assets suffered amid fears of higher trade tariffs, increased US-China tensions and looser US fiscal policy.
The question for investors is whether to stick with such trades now that Biden has dropped his bid for reelection. Markets may be jumpy as traders wait to see if Harris secures her party’s nomination and weigh if she can then gather enough momentum to challenge Trump’s lead in the polls.
“The knee-jerk reaction would be to say that this negative for the US
