Dollar softens ahead of U.S. election with stimulus in focus
The U.S. dollar dipped on Tuesday, hitting a one-month low against a basket of major currencies, as investors awaited the outcome of fiscal stimulus talks ahead of the upcoming U.S. presidential election and coronavirus cases spiked in Europe.
The dollar index declined for a second day, with the safe-haven currency hitting 92.991, its lowest since Sept. 21, as House Speaker Nancy Pelosi she was optimistic Democrats could reach a deal with the Trump administration on additional COVID-19 relief that could get aid out by early next month.
On the data front, U.S. single-family homebuilding surged to a more than 13-year high in September amid record-low mortgage rates and a migration to the suburbs and low-density areas in search of more room for home offices and schooling.
Elsewhere, the safe-haven yen edged up 0.05% against the dollar to 105.4650.
The euro, last up 0.49%, hit a one-month high of $1.184 versus the greenback, after having weakened 0.1% to $1.17600 in early London trading.
While markets are confident a win by Biden would lead to more fiscal stimulus, investors are also wary of a potentially contested election result that might boost the greenback’s safe-haven appeal.
Sterling dipped 0.07% to 1.2941.
Britain’s chief Brexit negotiator David Frost said there was no basis to resume trade talks with the European Union unless there was a fundamental change in Brussels’ approach.
Yuan to strengthen to 6.55 against U.S. dollar in a year’s time: Bank of Singapore
The Chinese yuan still has room to strengthen further given that China’s recovery remains a “bright spot” relative to the slower growth seen in the United States and Europe from the coronavirus pandemic, says Sim Moh Siong from the Bank of Singapore.
Reference: CNBC
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