Dollar Surge Amid Euro and Yen Struggles: Political Shifts Influence Currency Markets

The dollar gained strength this week as political turmoil in France and Japan affected the euro and yen. The euro fell after France's Prime Minister resignation, while the yen dropped due to political changes in Japan. The dollar hit a two-month high amidst these developments and U.S. economic uncertainties.

The dollar rose this Thursday, continuing a strong run throughout the week, fueled by political instability in Europe and Asia. The euro has faltered amid a crisis in Paris following the resignation of France's Prime Minister Sebastien Lecornu, while the yen has weakened with recent changes in Japan's ruling party leadership.

The euro faced further pressure after President Emmanuel Macron announced plans to appoint a new Prime Minister, defying market expectations of imminent elections. This development came as France's single currency dropped nearly 1% this week, trading at one of its lowest levels since late August, at $1.1616.

Meanwhile, the yen hovered around its lowest since February, falling almost 4% this week, with political changes following the appointment of Sanae Takaichi as the head of Japan's Liberal Democratic Party. The dollar has benefited from these shifts, reaching a two-month high. Investors are anticipating a 25 basis point cut at the next Federal Reserve meeting, even as U.S. economic data delays loom with the ongoing government shutdown.

(With inputs from agencies.)