The dollar and other major currencies remained in a tight range on Monday as investors focused on the upcoming U.S. midterm elections, which could reshape Congress and influence federal spending. The euro hovered near a 17-month low at $1.1159 in early Asian trading, pressured by Fitch's downgrade of France's credit outlook to 'negative.' Sterling held steady at $1.3387, while the dollar index stayed at 101.94.
In cryptocurrencies, bitcoin and ether recovered slightly after last week's $6.3 billion hack at Binance, the world's largest exchange. Bitcoin rose 0.22% to $77,975.62, while ether gained 0.27% to $2,268.42. Binance customers withdrew $3.64 billion over the weekend, though the exchange reported stabilizing outflows and substantial deposit volumes.
Analysts warned of potential market volatility ahead of the midterms, October U.S. jobs data, and central bank decisions in the UK, Australia, Norway, and Sweden. Eric Robertsen of Standard Chartered noted that polling often fails to predict election outcomes accurately, citing recent examples in Brazil and Israel. A Democratic sweep could complicate data center and AI infrastructure investments, he added.
Meanwhile, hedge funds faced 'significant losses' in October, reducing markets' ability to absorb election-related surprises, according to Andreja Cobeljic of AMINA Bank. The yen weakened 0.15% to 157.78 per dollar, while the Australian dollar held at $0.7033 ahead of a widely expected rate hike. The New Zealand dollar dropped 0.11% to $0.5625 after last week's central bank decision to hold rates.