By Rae Wee
SINGAPORE, Nov 2 (Reuters) – Major currencies, including the dollar, were largely stable on Monday as investors awaited the upcoming US midterm elections, which may alter the power dynamics in Congress as well as influence federal spending priorities.
In the cryptocurrency market, both bitcoin and ether experienced a slight recovery following last week’s unprecedented $6.3 billion theft at Binance, the largest cryptocurrency exchange globally.
Traders are preparing for a busy week ahead, featuring the US midterm elections, October job statistics from the US, and monetary policy announcements from central banks in Britain, Australia, Norway, and Sweden.
Ahead of these significant events, the euro has faced setbacks, hovering near a 17-month low at $1.1182 in Asian trading sessions, impacted by Fitch’s downgrade of France’s outlook from “stable” to “negative” after Friday’s trading concluded.
The British pound remained relatively unchanged at $1.3394, while the dollar saw a minor decline of 0.15%, trading at 101.83 against a basket of other currencies.
On Tuesday, voters in the United States will head to the polls to decide if Democrats can regain control of Congress from President Donald Trump’s Republican Party. Although Democrats are expected to secure the House of Representatives, the Senate races remain uncertain.
“One of the difficulties in predicting election results is that while polling indicates a strong anti-incumbent mood, this sentiment does not always result in actual electoral change, as we’ve seen in places like Brazil and Israel,” noted Eric Robertsen, the global research head and chief strategist at Standard Chartered.
Should the Democrats achieve a clean sweep in Congress, Robertsen warned that spending initiatives related to data centers and AI infrastructure could face significant hurdles at the state level, and the discussion around raising the US debt ceiling may become one of the most contentious in years.
Andreja Cobeljic, head of derivatives trading at AMINA Bank, remarked that hedge funds encountered “substantial losses” in October, creating a market environment with “limited capacity” to handle any surprises from the midterm elections.
In currency movements, the yen slipped 0.1% to 157.73 per dollar. Recently, Japan’s real interest rates have increased, particularly in longer-term zones, according to the central bank’s full quarterly outlook released on Monday.
The Australian dollar decreased 0.15% to $0.7022 as the market anticipates Tuesday’s policy decision, where the Reserve Bank of Australia is predicted to elevate its cash rate to a nearly two-decade peak of 4.85%.
The New Zealand dollar declined 0.26% to $0.5616, following a 1.2% drop last week after its central bank’s unexpected decision to maintain interest rates.