The dollar’s losses continued to deepen as the market opened on Thursday; the U.S. presidential election scheduled for next week overshadowed the latest review made by the Federal Reserve. In fact, indicators from the policymakers showed a possible interest rate hike next month.
The dollar started off shedding its modest gains and slipped against Japan’s Yen as the markets in Japan closed for the country’s public holiday. The dollar was last down by 0.7% at 102.57 yen, playing at the lowest level since October 4th and managed to go high in October 28th.
The Fed said nothing that the market investors and analysts do not know. Additionally, the focus in the forex market has shifted to the narrow lead Hillary Clinton has over Donald Trump. It is evident that this may result in a conventional change in the markets in a very narrow liquidity.
The predictions in the market indicate Hillary Clinton as the status quo candidate for the various forces in the market, stood ahead in numerous polls carried out before the Tuesday’s vote. In fact, some market analysts and investors have started pricing the possibility of Donald Trump’s victory.
Polls conducted by the RealClearPolitics site indicated Democrats Hillary Clinton just 1.7% ahead of Republican’s Donald Trump countrywide on Wednesday, having 47% support to her counterpart’s 45.3%. However, a Reuters/Ipsos poll done on the same day indicated Clinton ahead by 6% points among voters.
Other denting risk incident in Asia, a United States naval base at Sasebo was put on a lockdown after soon after gunshots were heard. A Navy Spokesman from western Japan indicated that there was no confirmation of any active shooter on the scene, and the base went back to its usual activities.
From recent market reactions to major incidences – even the time when risk aversion takes a lead – the yen has always emerged as the safe-haven currency. It is unaccepted to assume that the Bank of Japan did not make a swift move to correct the problem and follow its policy. The Bank of Japan further remained unsure of expanding its stimulus on Tuesday despite overlooking its time frame to hit the 2% inflation target.
The Federal Reserve did not shake the interest rates on Wednesday as many people would expect, but opted to wait for the economy to gather momentum and let the inflation pick up. However, they left a signal of a possible rate hike this December. Traders predicted a 72 per cent possibility of the Fed raising the interest rates next month.
Job data to be released on Friday
On Friday, a useful United States’ non-farm payrolls report will hit the market, and this may undermine or reinforce the interest rate hikes bets. From a prediction made by Reuters, jobs are expected to have risen by 175,000 in October.
The euro went up by 0.2 per cent to hit $1.1116 after it had risen by 0.6 at its loftiest peak to get to $1.1125 in October 11th. On the other hand, the dollar slipped 0.3 per cent against its counterpart the Swiss franc to hit at 0.9696 franc, accelerating upwards to weigh its overnight low level of 0.9691 franc, recording the value as its lowest since October 3rd.
The dollar index, which continually tracks the greenback other six major currencies, dropped 0.3 per cent to hit 97.089 after it had gone as low as 97.079 (the lowest value it recorded since October 11th).
Australian Dollar nearly hits a flat against the U.S. dollar
The Australian dollar had nearly gone flat against its counterpart the United States dollar at $0.7656, but it skidded 0.7 per cent compared to the resurgent Japanese yen, recording its lowest since October 14th as shown by the data from CMC Markets.
Donald Trump’s vows on how to curb immigration and his plan to reconsider the trading relationship with Mexico left the Peso staggering, and continued to slip for more than a one-month low against its counterpart the United States’ dollar. The Mexican peso had hit as low as 19.5172 pesos for each dollar, its lowest figure since September 30th.