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Dollar in narrow range ahead of U.S. election, pound weakens

Senin, 02 November 2020 / 12:17 WIB
Dollar in narrow range ahead of U.S. election, pound weakens
ILUSTRASI. The U.S. dollar steadied on Monday as investors prepared for U.S. presidential elections

Sumber: Reuters | Editor: Anna Suci Perwitasari

KONTAN.CO.ID - TOKYO. The U.S. dollar steadied on Monday as investors prepared for U.S. presidential elections on Tuesday, while a surge in global coronavirus cases continued to weigh on sentiment.

The greenback held onto gains after posting its largest weekly percentage rise since late September in the previous trading session.

The pound inched lower on cornavirus worries, after British Prime Minister Boris Johnson announced over the weekend a one-month lockdown across England.

Investors are sticking to the U.S. currency, which is often considered to be safe, as Tuesday's presidential election keeps financial markets on edge.

Baca Juga: South Korea expands mask requirements as COVID-19 cases grow

Democratic challenger Joe Biden leads in national opinion polls though the race is seen as close in enough battleground states that President Donald Trump could achieve the 270 votes needed to win in the state-by-state Electoral College that determines the overall victor.

"Currency volatility can extend well beyond Election Day because there is a high risk the losing candidate will dispute the election results. The 2000 election took around one month to resolve the disputes," analysts at Commonwealth Bank of Australia said in a client note.

The dollar index, which tracks the greenback against a basket of major currencies, last sat at 94.17, near its one-month high of 94.195.

Meanwhile, the novel coronavirus continues to ravage already-battered economies.

England's lockdown aimed to last until Dec. 2 could be extended as Britain struggles to contain a second wave of COVID-19, a senior cabinet member said on Sunday. The United Kingdom is grappling with more than 20,000 new coronavirus cases a day.

Against the dollar, the pound was last down 0.39% to $1.2904 , with traders also eyeing updates on Brexit trade talks. EU and British Brexit negotiators will continue talks in Brussels on Monday until around mid-week, people on both sides told Reuters.

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In Europe, new COVID-19 cases have doubled in five weeks, a Reuters tally showed, with total infections surpassing 10 million.

The euro steadied in Asian trade but was close to hitting long-term lows against the greenback and Japanese yen.

It last fetched $1.1638, extending losses after a near one-month low of $1.1640 against the U.S. dollar seen last week, while against the yen, the common currency changed hands at 121.83.

"The euro has been selling since infection cases and lockdowns stood out in Europe," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

"But infection cases in other countries, like the U.S., have been on a rise as well. As time goes on, I think increasing coronavirus cases and lockdowns will be common topics in any country, to the extent that they are no longer themes for the currency market," he said.

Indeed, the United States posted nearly 87,000 cases on Saturday and record hospitalisations in Midwestern states.

The risk-sensitive Australian dollar also took a hit from global coronavirus concerns, last trading at $0.6999 after slipping to its lowest since July at $0.6997.

The greenback was little changed against the yen at 104.72 yen, away from a five-week trough of 104.02 hit on Thursday.

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"Dollar/yen will likely remain quiet for today and tomorrow, due to the election," Daiwa Securities chief FX strategist Mitsuo Imaizumi said, but added any dispute over vote count could lead to volatility.

Chinese yuan last sat at 6.6883 per dollar, as China's factory activity data, both private and official, were above analysts' expectations.

Besides the U.S. presidential election, this week is filled with economic data, including PMI data from the United States, euro zone and elsewhere, as well as U.S. non-farm payrolls and Chinese trade.

Three central banks are also due to announce policy decisions this week. The Reserve Bank of Australia meets on Tuesday, while the Bank of England and U.S. Federal Reserve deliver their decisions on Thursday.


Selanjutnya: Oil prices slip 3% as Europe widens lockdowns


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