Currency Fluctuations Amid Global Political Uncertainty

The euro and yen edged towards a third consecutive daily decline against the U.S. dollar, influenced by political instability in France and anticipated fiscal expansion in Japan. These factors are expected to drive up the risk premium on government bonds, impacting both currencies negatively.

The dollar's strength was bolstered by its safe-haven appeal, with odds for a quick resolution to the U.S. government shutdown appearing slim. The dollar index rose to its highest point since early August, as President Trump threatened drastic measures during the governmental standoff.

Uncertainty looms over the euro and potential political changes in Japan, as investors speculate on future economic policies and their impact on currencies. Meanwhile, the kiwi dollar dropped significantly following the Reserve Bank of New Zealand's unexpected interest rate decisions.

(With inputs from agencies.)