SINGAPORE (Reuters) – Cryptocurrency Bitcoin hit a three-month high in early Asian trading on Monday, with the dollar set to extend its gains in the countdown to the U.S. presidential election in two weeks.
Election polls show former President Donald Trump's chances of winning the Nov. 5 election are increasing, as his proposed tariff and tax policies will keep U.S. interest rates high and increase the odds of winning the Nov. 5 election. It is seen as likely to damage the currencies of trading partners, pushing up the dollar.
Currency movements in major markets last week were driven by dovish interest rate cuts from the European Central Bank and strong US economic data, which boosted expectations of how quickly US interest rates would fall, especially if Trump wins the presidency. It was done.
The yen fell 0.1% to 149.32 yen to the dollar, maintaining a strong yen level of 150 yen to the dollar, briefly breaking above that level for the first time since early August last week.
The dollar index against its main rival was 103.45. It fell 0.3% on Friday as risk appetite rose broadly across markets after China announced details of a wide-ranging economic stimulus plan, but rose 0.55% for the week. The euro was flat at $1.0866, and the pound was also flat at around $1.3045.
Bitcoin has rallied on the improving outlook for President Trump, as the Trump administration is seen as taking a more relaxed stance on regulating cryptocurrencies. It last rose 0.8% to $69,400, and has increased 18% since October 10th.
With no major economic events scheduled this week, market focus will be on corporate earnings and US election risk, as well as the potential rise in costs of hedging dollar and other portfolio risks, says Australian online brokerage Pepperstone. said Chris Weston, head of research. Note.
“With 15 days left until the U.S. presidential election, traders need to decide whether now is the right time to enter into election trading with greater conviction,” Weston said.
He said the clearest way to express President Trump's tariff risk is to go long the dollar against the euro, the Swiss franc, and the Mexican peso.
Brad Bechtel, global head of foreign exchange at Jefferies, also noted that rising real interest rates are supporting the dollar's strength, particularly against these three currencies.
“We expect this trend to continue into the election campaign, and likely to continue long after the election if Mr. Trump wins,” Bechtel wrote.
Last week, the yen fell by 0.3%, the euro by 0.6%, the pound was flat and the dollar index rose by 0.55%. The Mexican peso fell 3%.
The euro has fallen more than 3% in three weeks, falling below its 200-day moving average and hovering near its lowest level in two and a half months.
(Edited by Sam Holmes)
