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Forex - Dollar slips ahead of Fed, U.S. jobs data and election

Investing.com -

Investing.com - The dollar edged lower against the other major currencies on Tuesday as investors weighed the Federal Reserve monetary policy announcement, Friday's U.S. employment data and the upcoming U.S. presidential election.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, dipped to 98.26.

The index gained 3% in October amid expectations for a December rate hike by the Fed, despite dropping last Friday after the FBI said it would review more emails related to Hillary Clinton's private email use while she was secretary of state.

The news sparked fresh uncertainty over Mrs. Clinton's election prospects ahead of the November 8 vote, amid fears over the implications of a victory for Republican candidate Donald Trump.

Investors were also looking Friday's U.S. jobs report for October for signs that the economy is on a strong enough footing to handle an interest rate hike this year.

The Fed will make its latest monetary policy announcement later Wednesday, but a rate hike ahead of the November 8 presidential election is seen as unlikely.

Investors currently price a 73% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool .

The yen was slightly lower, with USD/JPY up 0.215 to 105.03, just shy of Friday's three-month highs of 105.52.

The yen showed little reaction after the Bank of Japan refrained from unveiling fresh stimulus measures at the conclusion of its policy meeting, despite a warning on the inflation outlook.

The Reserve Bank of Australia also kept its interest rate unchanged at 1.5% in Tuesday and said it expects the economy to grow near potential over the next year.

AUD/USD hit highs of 0.7673 following the announcement, the highest level since last Wednesday.

Sterling edged higher after Bank of England Governor Mark Carney said he would extend his stay for an extra year, until Brexit negotiations have ended in 2019.

GBP/USD was at 1.2244, while EUR/USD was little changed at 1.0988.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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