Last week, investors had already started to price President Joe Biden's withdrawal from November's race. The DXY dollar index opened in Asia today about 0.1% lower on the news, but quickly edged higher, as did US yields, FX strategist at ING Chris Turner notes.

Markets don’t care much about Biden’s withdrawal

“On the subject of politics, it looks like the US data this week could actually be good news for the Democrats. Second quarter US GDP on Thursday is expected to bounce back above 2% quarter-on-quarter annualised, while Friday's release of June's core PCE inflation data should see the Federal Reserve's preferred gauge of inflation coming in on target at 0.2% month-on-month.”

“This set of releases looks unlikely to move the needle on the pricing of Fed cuts this year, where the market currently expects a 57bp reduction. We doubt consensus releases here have to send the dollar much lower, and instead, they will probably cement the low volatility environment currently in place in FX markets.”