The dollar slipped in Asia on Monday as investors braced for a potential pivot this week for the global economy as the United States chooses a new leader, and as it likely cuts interest rates again with major implications for bond yields.
The euro rose 0.4% to $1.0884 but faces resistance around $1.0905, while the dollar fell 0.7% on the yen to 151.81 yen . The dollar index eased 0.1% to 103.79.
Treasury futures rallied 10 ticks, recovering some of the losses suffered on Friday.
Democratic candidate Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls and the winner might not be known for days after voting ends.
Analysts believe Trump's policies on immigration, tax cuts and tariffs would put upward pressure on inflation, bond yields and the dollar, while Harris was seen as the continuity candidate.
Dealers said the early dip in the dollar might be linked to a well-respected poll that showed Harris taking a surprise 3-point lead in Iowa, thanks largely to her popularity with female voters.
Uncertainty over the outcome is one reason markets assume the Federal Reserve will choose to cut rates by a standard 25 basis points on Thursday, rather than repeat its outsized half-point easing.
Futures imply a 99% chance of a quarter-point cut to 4.50%-4.75%, and an 83% probability of a similar-sized move in December.
The Bank of England also meets Thursday and is expected to cut by 25 basis points, while the Riksbank is seen easing by 50 basis points and the Norges Bank is expected to stay on hold.
The Reserve Bank of Australia holds its meeting on Tuesday and again is expected to hold rates steady.
The BoE's decision has been complicated by a sharp sell-off in gilts following the Labour government's budget last week, which also dragged the pound lower.
Early Monday, sterling had regained some of its losses to stand at $1.2963 , some way from last week's trough at $1.2841.
More stimulus is also expected from China's National People's Congress, which is meeting from Monday through Friday.
Sources told Reuters last week that Beijing is considering approving next week the issuance of more than 10 trillion yuan ($1.40 trillion) in extra debt in the next few years to revive its fragile economy.
Source : Reuters
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