SYDNEY (Reuters) – The dollar hit a 10-week low on Monday, as investors chose Jude Biden’s election as US president to buy trade-expected currencies on an expected basis, leading to a White House May promote world commerce and monetary policy should remain smooth.
Chinese yuan CNY = New Zealand dollar, at 28-month peak NZD = D3 19 month high and made Australian dollar AUD = D3 Dollar Index reached its lowest level since early September = USD. South Korean won KRW = Hit a 21-month high of 1,115.33 per dollar Gbp = d3 Euro hits its highest in more than two months Euro = 0.1% growth, a rise of nearly 2% from the previous week to a two-month high of $ 1.1895.
Biden crossed the 270 electoral college votes needed for victory on Saturday at Pennsylvania’s Battleground. Republicans appear to retain control of the Senate, though the final makeup may not be evident until the runoff votes in Georgia in January.
“The result is ideal from a market standpoint,” said Michael McCarthy, chief strategist at CMC Markets in Sydney. “Neither party controls Congress, so both trade wars and high taxes are largely off the agenda.”
The prospect of more gridlock also means that expectations have been lowered for the US fiscal stimulus package, which has sent increasingly lower yields in anticipation of lower borrowing from the US Federal Reserve and more quantitative easing.
Yen of broad dollar weakness was JPY = A touch firm against the US dollar and Friday’s eight-month low is equivalent to 103.18 yen per dollar, while lower US bond yields made the Treasury less attractive to eccentric buyers in Japan. [US/]
The yuan is particularly sensitive to the election result due to the assumption that Biden will take a softer or more predictable line over China, which was pegged at 6.5826 per dollar by strong Chinese trade data over the weekend.
Westpac currency analyst Sean Callow said, “The impact of the dollar’s weakness is a way to move in the context of the Fed, as well as positive trade stress for some currencies.”
On Monday, Czechs made major strides as the money market reacted largely to Biden’s victory on Friday and because Donald Trump, bent for the first time in 28 years to lose the electoral bid again, won the victory. Has not given any indication.
Kim Mundy, currency analyst at the Commonwealth Bank of Australia, said in a note, “We would caution that the increased volatility is not behind us, even if the election outcome is all set.
The president, who has spent months trying to tame the election results with unproven accusations of fraud, has promised to move forward with a legal strategy on Saturday that he hopes will reverse the state’s results that led to Biden. Won the victory.
Traders have also warned of an increase in coronovirus cases, topping 50 million globally of infections on Sunday, surpassing 10 million in the United States and raising concerns of more lockdowns.
Later Monday there is the presence of Andrew Bailey, Governor of the Bank of England and Andy Haldane, Chief Economist at 1035 GMT and 1400 GMT, where negative rates are noted. Dallas Fed President Robert Kaplan makes a speech at 2200 GMT.
On Wednesday, the Reserve Bank of New Zealand expects it to hold rates but will outline a downside next year.
In emerging markets, beaten-down Turkish lira TRYTOM = D3 There was a 2% increase in the wake of the removal of the central bank chief and the resignation of Turkey’s finance minister over the weekend.
The lira has slipped 30% to record levels this year among investors worried about forex reserves and double-digit inflation due to the coronavirus virus epidemic.
Graphic: World FX rates here in 2020
Reporting by Tom Westbrook; Editing by Ana Nicolasi da Costa