In Europe, the euro showed little reaction to news that France’s parliament voted to oust Prime Minister Francois Bayrou on Monday

The dollar extended its decline on Monday in the wake of Friday’s soft U.S. jobs report, which all but strengthened an interest rate cut this month, even as the yen dropped after Japanese Prime Minister Shigeru Ishiba announced his resignation over the weekend.

In Europe, the euro showed little reaction to news that France’s parliament voted to oust Prime Minister Francois Bayrou on Monday. The parliament brought down the government over its plans to tame the growing national debt, plunging the euro zone’s second-largest economy deeper into political crisis.

Europe’s common currency was last up 0.2% on the day versus the dollar at $1.1751.

Analysts said the outcome of the vote had been expected.

In Japan, Ishiba on Sunday said he would step down, ushering in a potentially lengthy period of policy uncertainty for the world’s fourth-largest economy, the most heavily indebted industrialised nation.

That pushed the yen lower across the board and by mid-morning trading the dollar was up just 0.2% against the Japanese currency at 147.695, after rising by as much as 0.8% on the day.

But the market’s attention was on the U.S. dollar after a non-farm payrolls shock on Friday which reinforced expectations that the central bank will resume cutting interest rates at a policy meeting later this month.

The driving force in the foreign exchange market remains the dollar and U.S. developments, said Marc Chandler, chief market strategist at Bannockburn Forex in New York.

People can talk about Japanese politics, but the real driver of dollar/yen is not Japanese politics, or Japanese interest rates. It’s U.S. interest rates, and with the market pricing in about a 10% chance of a 50 basis-point cut, the dollar is falling, he added.

Against the Swiss franc, the dollar declined to its lowest since July 24, and was last down 0.5% at 0.7937.