TOKYO – The dollar flirted with three-week lows on Tuesday as investors stuck to hopes that there will be large U.S. fiscal stimulus after the Nov. 3 election to shore up a pandemic-hit economy, supporting riskier currencies.

The dollar index stood at 93.036, just above Friday’s near-three-week low of 92.997. The euro traded at $1.1841, having gained 0.60% on Monday.

“It seems there is a strong optimism that eventually there will be stimulus. It is hard to argue against fiscal expansion given the coronavirus epidemic is almost like a natural disaster,” said Makoto Noji, chief currency and foreign bond strategist at SMBC Nikko Securities.

DOLLAR’S RECENT DIRECTION POINTS TO BIDEN WIN

While markets are getting sceptical about the chances of having a bipartisan package before the election, a widening lead by Democratic presidential candidate Joe Biden over President Donald Trump is leading investors to expect big stimulus after the election.

A Biden victory is also seen as negative for the dollar partly because his pledge to hike corporate tax would reduce returns from investments in the United States.

The dollar flirted with three-week lows on Tuesday as investors stuck to hopes that there will be large U.S. fiscal stimulus after the Nov. 3 election to shore up a pandemic-hit economy, supporting riskier currencies. (iStock)

Thus the dollar also weakened against currencies that are deemed “safer” – those that tend to have small or inverse relations with risk sentiment – such as the yen and the Swiss franc.

The yen strengthened to 105.34 per dollar while the Swiss franc traded at 0.9102 to the dollar, near its highest in three weeks.

Sterling traded above the key $1.30 level as hopes for a Brexit deal offset concerns about pressure

(Bloomberg) — The dollar may tumble to its lows of 2018 on the rising likelihood of Joe Biden winning the U.S. election and progress on a coronavirus vaccine, according to Goldman Sachs Group Inc.

“The risks are skewed toward dollar weakness, and we see relatively low odds of the most dollar-positive outcome — a win by Mr. Trump combined with a meaningful vaccine delay,” strategists including Zach Pandl wrote in a note Friday. “A ‘blue wave’ U.S. election and favorable news on the vaccine timeline could return the trade-weighted dollar and DXY index to their 2018 lows.”



chart, histogram: Hedge funds turned bearish on the greenback for first time since 2018 in August


© Bloomberg
Hedge funds turned bearish on the greenback for first time since 2018 in August

The ICE U.S. Dollar Index has fallen almost 3.5% this year — trading just over the 93 level on Monday — as investors reacted to unprecedented pandemic-related monetary stimulus from the Federal Reserve and rock-bottom interest rates. The gauge traded below 89 in 2018, a level which would imply a further slide of more than 4%.

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Goldman joins the likes of UBS Asset Management and Invesco Ltd. in predicting a weaker dollar as Biden extends his lead over President Donald Trump with less than three weeks to election day. It recommends investors short the dollar against a volatility-weighted basket consisting of the Mexican peso, South African rand and Indian rupee.

The strategists also suggest buying the euro, Canadian and Australian dollars against the greenback. The firm is keeping open long recommendations for the yuan through unhedged Chinese government bonds.

“The wide margin in current polls reduces the risk of a delayed election result, and the prospect for near-term vaccine breakthroughs may provide a backstop for risky assets,” they wrote.

Read more: Trump-Biden Volatility Is Giving Traders Butterflies: QuickTake

(Updates pricing in third paragraph.)

For more

New York (Reuters) – The dollar index held near three-week lows on Monday as optimism over the possibility of a COVID-19 relief bill was curbed by concern over the pandemic while China’s yuan fell after the People’s Bank of China (PBOC) changed its reserve requirements policy.

FILE PHOTO: Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration

On Sunday, the Trump administration called on Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package continue to run into roadblocks.

The greenback has held within a range of about 2% over the past three weeks as talks have gone back and forth. The dollar had its biggest loss in six weeks on Friday amid rising hopes a fiscal stimulus package would be agreed to stem the economic fallout from COVID-19. More stimulus is seen as negative for the dollar.

“The chances of getting a comprehensive stimulus deal before the election are slim,” said Edward Moya, senior market analyst, at OANDA in New York.

“So what that means is that the damage to the economy is going to grow and it means that right now we are talking somewhere around $1.8 or $2 trillion …and that just means the stimulus is going to be bigger the longer they wait.”

The offshore yuan CNHUSD=R fell 0.8% against the dollar after China’s central bank said on Saturday it would lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move seen as a bid to curb recent yuan appreciation.

The yuan had reached a more than 17-month high on Friday in offshore trade and has gained nearly 8% against the

By Hideyuki Sano



a close up of a bottle: FILE PHOTO: Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration


© Reuters/DADO RUVIC
FILE PHOTO: Saudi riyal, yuan, Turkish lira, pound, U.S. dollar, euro and Jordanian dinar banknotes are seen in this illustration

TOKYO (Reuters) – The dollar inched up in early Monday trade as riskier currencies slipped after negotiation on a U.S. stimulus package ran into resistance and as the yuan dropped after China’s central bank took a measure seen as aimed at curbing its strength.

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The euro slipped 0.1% to $1.1817 while the Australian dollar shed 0.3% to $0.7222 . The yen was little changed at 105.52 to the dollar .

The U.S. dollar index edged up to 93.108 , bouncing back from Friday’s near-three-week low of 92.997. The index saw its biggest loss in six weeks on Friday on hopes that a deal for new U.S. stimulus would be reached.

President Donald Trump on Friday offered a $1.8 trillion coronavirus relief package in talks with House Speaker Nancy Pelosi – moving closer to Pelosi’s $2.2 trillion proposal.

But Trump’s offer drew criticism from several Senate Republicans, many of whom are uneasy about the nation’s growing debt and concerned a deal would cost Republicans support in the upcoming presidential election, denting the risk-on mood.

Still, with Nov. 3 election only weeks away, investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

“Over the past few days, the markets seem to assume Biden will win the election. Trump seems desperate to get a deal but his comments are getting treated like a noise,” said Yusuke Okada, manager of forex at Mitsubishi Trust Bank.

“But I do think we could see a return of political uncertainties by the election. Markets seem to have priced in only the good news,” he added.

Video: Potential US

TOKYO – The dollar inched up in early Monday trade as riskier currencies slipped after negotiation on a U.S. stimulus package ran into resistance and as the yuan dropped after China’s central bank took a measure seen as aimed at curbing its strength.

The euro slipped 0.15% to $1.1818 EUR= while the Australian dollar shed 0.25% to $0.7223 AUD=D4.

The yen was little changed at 105.65 to the dollar JPY=.

WHY EVERY ONE OF YOUR DOLLARS DURING CORONAVIRUS NEEDS A NAME: DAVE RAMSEY

The U.S. dollar index edged up to 93.104 =USD, bouncing back from Friday’s near-three-week low of 92.997. The index saw its biggest loss in six weeks on Friday on hopes that a deal for new U.S. stimulus would be reached.

President Donald Trump on Friday offered a $1.8 trillion coronavirus relief package in talks with House Speaker Nancy Pelosi – moving closer to Pelosi’s $2.2 trillion proposal.

But Trump’s offer drew criticism from several Senate Republicans, many of whom are uneasy about the nation’s growing debt and concerned a deal would cost Republicans support in the upcoming presidential election, denting the risk-on mood.

The dollar inched up in early Monday trade as riskier currencies slipped after negotiation on a U.S. stimulus package ran into resistance and as the yuan dropped after China’s central bank took a measure seen as aimed at curbing its strength. (iStock


Still, with Nov. 3 election only weeks away, investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

“On the whole, the big picture has not changed that much,” said Kyosuke Suzuki, director of forex at Societe Generale.

The offshore Chinese yuan dropped after the People’s Bank of