The dollar gets back on its feet before the U.S. midterm elections.

Asian Trade TVNovember 8, 2022

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SINGAPORE – The dollar held steady on Tuesday during trade in Asia, as bets on China’s reopening lost some of their momentum and traders looked ahead to the U.S. midterm elections.

The yuan had its best day in two years on Friday, and it has kept most of those gains since. However, it gave back a little bit through Tuesday to trade at $7.2442 per dollar as new COVID-19 outbreaks took away some of the optimism.

Related: Rates for the dollar, the euro, and the pound in Pakistan on November 7, 2022

As a result, the growth-sensitive Australian and New Zealand dollars also fell by about 0.5 percent, leaving the Aussie at $0.6449 and the Kiwi at $0.5916. Earlier, the kiwi had reached a seven-week high of $0.5951.

Later in the day, the markets will be paying more attention to the U.S. midterm elections. A Republican win is expected, which will lead to gridlock in Congress. It could take days to get a clear answer.

Some analysts say that if this happens, there will be less fiscal stimulus, which could be good for bonds but bad for the dollar.

Damien Boey, chief macro strategist at Barrenjoey in Sydney, said, “If we get gridlock or a Republican sweep, it won’t be as easy to get fiscal stimulus through next year. This means that (Federal Reserve chair Jerome) Powell can take his foot off the interest rate hike accelerator.

The euro was getting close to going back below $1, and it last traded at exactly $1. Sterling, which went up on Monday, was 0.2% weaker at $1.1490, and the focus was on the November 17 fiscal update.

China has a strict policy about viruses that includes lockdowns, quarantines, and a lot of testing. Over the weekend, officials said that these measures are “completely right” and will stay in place. But small changes have been enough to keep traders from giving up hope.

Rodrigo Catril, a senior currency strategist at National Australia Bank (OTC:NABZY) in Sydney, said, “Where there’s smoke, there’s eventually fire. So the market is pricing in improved optimism, even though right now it’s all based on hopes.

He said, “It’s very cool and growth-friendly.”

Bitcoin dropped 5% to $19,600, and ether fell sharply. Traders said this was because people were worried about the brokerage FTX after its rival Binance said it would sell its holdings of FTX’s native token.

At 146.35 yen per dollar, the Japanese yen reached its highest point in the last week. In October, Japan’s foreign currency reserves fell at the second-fastest rate ever for a single month. This was because the government spent 6.35 trillion yen to support the yen.

A summary of what was said at the Bank of Japan’s policy meeting in October showed on Tuesday that policymakers talked about the need to watch out for the side effects of long-term monetary easing and the possible effects of a future exit from ultra-low interest rates.

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Bid prices for currency at 5:38 GMT

RIC Last U.S. Close Percentage Change Year-to-Date Percentage High Bid Low Bid

Before Change

Session

Euro/Dollar

$1.0000 $1.0017 -0.17% +0.00% +1.0031 +1.0000

Dollar/Yen

146.7650 146.4950 +0.17% +0.00% +146.7950 +146.3600

Euro/Yen

146.76 146.91 -0.10% +0.00% +146.9900 +146.6900

Dollar/Swiss