The euro weakened on Monday as violent protests in France unsettled investors, helping the US dollar stabilise near its lowest levels of the month during subdued Asian trading.
The euro fell 0.1 per cent to $1.1230, while the dollar index held at 101.82 after recently trading near its monthly lows.
French President Emmanuel Macron condemned what he described as “shocking” scenes of violence during protests over the cost of living. His televised address on Sunday followed one of France’s most serious days of unrest in years.
Kieran Williams, head of Asia foreign exchange at InTouch Capital Markets, said the unrest was likely to affect the euro mainly through French government bonds rather than directly. With the yield gap between French and German government bonds already near 140 basis points, he expected the euro to remain under pressure until there was greater clarity over France’s budget.
The dollar was little changed at 158.09 yen after Bank of Japan Governor Kazuo Ueda said underlying inflation was “quite close” to the central bank’s 2 per cent target.
Against the offshore Chinese yuan, the dollar slipped 0.1 per cent to 6.6811, its weakest level since June 2022. The move followed data showing China’s gross domestic product grew slightly more than expected in the third quarter.
In Southeast Asia, the Indonesian rupiah fell for a fourth consecutive day, losing 0.2 per cent and approaching its weakest level in nearly three months. The currency has faced pressure since index provider MSCI threatened last week to downgrade Indonesia’s stock market from its flagship emerging markets index to “standalone” status. The announcement triggered an 11.6 per cent plunge in Indonesian equities.
MUFG analysts said the MSCI concerns were adding to pressure on the rupiah, alongside higher US yields, weaker external balances linked to elevated oil prices and a more difficult policy balance for Bank Indonesia.
Elsewhere, the Australian dollar rose 0.5 per cent to $0.6975, while the New Zealand dollar held at $0.5655. The British pound was steady at $1.3329.
Oil prices also declined in Asian trading. Brent crude futures dropped 1.7 per cent to $108.01 a barrel after US President Donald Trump waived sanctions and tariffs on Russia, a move that could allow more Russian fuel exports.
Markets continued to expect the US Federal Reserve to leave interest rates unchanged at its next two-day meeting, beginning on October 28. Fed funds futures indicated an 87 per cent probability of a hold, little changed from Friday.
Williams said investors were likely to remain cautious ahead of the Federal Reserve’s October 28 meeting and the European Central Bank’s meeting on October 29, while developments in France could continue to unsettle markets.
In cryptocurrency markets, bitcoin rose 1.9 per cent to $82,479.24, while ether gained 3 per cent to $2,420.22.
Ojo Triumph
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