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The US dollar and other major currencies traded in narrow ranges on Monday as investors prepared for this week’s US midterm elections.
The elections could change the balance of power in Congress and influence control over federal spending.
Meanwhile, Bitcoin and Ether remained under pressure following last week’s reported $6.3 billion theft from Binance, the world’s largest cryptocurrency exchange.
Markets are also preparing for a busy week of economic events. These include US October employment data and interest rate decisions in the UK, Australia, Norway and Sweden.
The euro traded near a 17-month low of $1.1159 in early Asian trading. The currency faced pressure after Fitch revised France’s credit outlook to negative from stable on Friday.
Sterling remained almost unchanged at $1.3387. The dollar also held steady at 101.94 against a basket of major currencies.
US voters are due to elect members of Congress on Tuesday. The results will determine whether Democrats can take control of either chamber from President Donald Trump’s Republican Party.
Democrats are widely expected to win the House of Representatives. However, the Senate contest remains less certain.
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Eric Robertsen, global head of research and chief strategist at Standard Chartered, said anti-incumbent sentiment in polling does not always translate into election results.
He cited previous elections in Brazil and Israel as examples of this uncertainty.
Robertsen said a Democratic sweep of Congress could create obstacles for investment in data centres and artificial intelligence infrastructure. He also warned that the next debate over raising the US debt ceiling could become one of the most contentious in recent history.
Andreja Cobeljic, head of derivatives trading at AMINA Bank, said hedge funds had suffered significant losses in October. This had left markets with limited capacity to absorb unexpected election results, she added.
The Japanese yen weakened 0.15% to 157.78 per dollar.
The Australian dollar remained flat at $0.7033 ahead of Tuesday’s Reserve Bank of Australia policy decision. Markets widely expected the central bank to raise its cash rate to 4.85%, a level near a two-decade high.
The New Zealand dollar slipped 0.11% to $0.5625. It had already lost 1.2% last week after the country’s central bank unexpectedly left interest rates unchanged.
Bitcoin rose 0.22% to $77,975.62 on Monday. However, it had fallen to a six-week low on Friday.
Ether gained 0.27% to $2,268.42 after reaching a two-month low last week.
The cryptocurrency market remained unsettled following the reported $6.3 billion theft from Binance. The exchange resumed operations on Sunday after the incident.
Binance customers withdrew $3.64 billion, representing 2.1% of the platform’s assets, according to the report. The exchange said withdrawals were stabilising after an initial surge. It also reported that deposit volumes remained substantial.
Binance said it had covered 95% of the stolen assets.
The FBI has linked the hackers to North Korea, according to the report.
Richard Forss, chief technology officer at global prime broker EXANTE, said the incident exposed weaknesses in the security practices surrounding cryptocurrency platforms.
He argued that although blockchain technology has become mathematically secure, the industry still relies on trusted employee devices. He described that reliance as a major weakness in digital finance.
[…] Dollar Holds Steady Ahead of US Midterm Elections as Bitcoin and Ether Face Pressure […]