Dollar Drives Higher as Markets Concentrate on U.S. Election

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On Monday, the dollar pushed higher against the other major currencies, as the increasing opinion that Hillary Clinton could win the approaching presidential election continued to lift demand for the dollar.

EUR/USD  dropped 0.93% to 1.1036, the lowest since November 1.

The dollar made progress as hopes for a Clinton win mounted after the FBI informed Congress over the weekend that it had “not changed its conclusions” on the private email server upheld by the Democratic candidate.

The dollar also stayed supported after the Labor Department stated on Friday that the U.S. economy added 161,000 occupations in October from the previous month and that the unemployment rate marked down to 4.9%.

The statistics supported expectations for a December rate hike by the Federal Reserve.

In the euro zone, data earlier presented that German factory orders decline 0.6% in September, confounding expectations for a 0.3% increase. Factory orders surge 0.9% in August, whose number was revised from a previously estimated 1.0% hike.

Somewhere else, GBP/USD plunged 0.96% to 1.2395, off Friday’s one month high of 1.2559.

The pound had supported broadly after the UK high court ruled the previous week  that the government does not have the power to trigger Article 50 of the Lisbon Treaty to start the UK’s exit from the European Union without a parliamentary vote.

USD/JPY rallied 1.32% to a one week peak of 104.45, while USD/CHF  advanced 0.95% to 0.9774.

The Australian dollar moved higher, with AUD/USD increased 0.26% at 0.7695, while NZD/USD fell 0.11% to 0.7316.

In the meantime, USD/CAD held steady at 1.3398.

The loonie was supported by a rebound in oil prices on Monday after OPEC secretary general Mohammed Barkindo stated the Organization is committed to a planned reduction in output to 32.5-33 million barrels per day.

The U.S. dollar index, which gauges the greenback’s strong point against a trade weighted basket of six major currencies, increased 0.92% at 97.83, off Friday’s three and a half week declines of 96.94 and the highest level since November 1.

On Additional News

On Tuesday, the Australian and New Zealand dollars slipped lower against their U.S. counterpart, as investors stayed cautious  ahead of the U.S. presidential election and as unsatisfactory Chinese trade data influenced.

AUD/USD dropped 0.32% to 0.7703, off Monday’s two-and-a-half week high of 0.7731.

The NZD / USD  dropped 0.20% to trade at 0.7328, just below the previous session’s more than one month peak of 0.7361.

Somewhere else, data earlier Tuesday indicated that China’s trade surplus widened to $49.06 billion in October from $41.99 billion the previous month, disappointing expectations for a trade surplus of $51.70 billion.

The report indicated that China’s imports declined by a yearly rate of 1.4% the previous month, while exports dropped 7.3%.

China is Australia’s largest export partner and New Zealand’s 2nd  biggest export partner.

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