Dollar demand declines following Biden’s drop from the 2024 presidential race

Key Movers

In Eurozone news, the EUR/USD pair traded close to 1.0870 this morning. The pair remained mostly steady amid increased speculation that the European Central Bank (ECB) will cut interest rates two more times this year. ECB policymaker Francois Villeroy de Galhau said in an interview on French radio BFM Business, "Market expectations for the path of interest rates seem rather reasonable to me at the moment," Reuters reported.

The British pound, on the other hand, continued to draw support from decreased expectations of an interest rate cut by the Bank of England (BoE) in August. In fact, BoE Chief Economist Huw Pill noted earlier this month that there is still some work to do before the persistent inflation is gone.

JPY broke two days of losses today as traders geared up for the Bank of Japan’s (BoJ) policy meeting next week. Markets believe an interest rate hike might be on the table to support the JPY. Japan’s Prime Minister Fumio Kishida stated that normalizing the central bank’s monetary policy would aid Japan's shift to a growth-driven economy.

USD/CAD surged over 3.70% so far in 2024, with a recent uptick over the last few days aiding this gain. The pair sat in the mid-1.37 levels this morning ahead of the Bank of Canada (BoC) rate decision later this week. The BoC is expected to cut rates once again on July 24th. In oil news, West Texas Intermediate (WTI) crude oil hit five-week lows this morning to trade near the $78.30 per barrel range.