Investing.com — Asian currencies mostly strengthened on Wednesday as the dollar retreated amid uncertainty over U.S. midterm election results, while the Chinese yuan remained weaker after Beijing moved to curb its recent rally.
The Australian dollar remained near a two-week low after the Reserve Bank raised its cash rate by 25 basis points to 4.85%, its fifth increase this year and the highest level in 18 years. A surprisingly divided 6-3 vote, with three policymakers favouring a hold, fuelled expectations that the tightening cycle may be nearing its end.
The U.S. dollar index fell 0.5% to 101.34. The South Korean won strengthened 0.5% to 1,337.98 per dollar, while the Singapore dollar gained 0.1% as the USD/SGD pair slipped to 1.2795.
The Australian dollar edged down 0.1% to $0.6964, while the New Zealand dollar rose slightly to $0.5598. The Japanese yen strengthened 0.7% to 157.64 per dollar. The euro gained 0.5% to $1.1251 and sterling rose 0.4% to $1.3470.
Dollar reverses monthly rally as election results and Iran tensions loom
The dollar spot index is trading close to its 2026 high reached last month. Rising Treasury yields, stronger economic data and a revival in AI-related stocks supported the dollar.
Recent factory data showed U.S. production expanding at its fastest pace since 2021, while job openings increased by 333,000 to 7.523 million, exceeding forecasts. Hot inflation data last month had also strengthened expectations of further Federal Reserve tightening.
Investors are also looking ahead to Friday’s October nonfarm payrolls report, which DBS expects to show an increase of 100,000 jobs, up from 29,000 in September.
However, the dollar’s advance faded on Wednesday as election results began to emerge. Democrat Jon Ossoff won re-election in Georgia, while Roy Cooper flipped a Republican-held Senate seat in North Carolina.
Control of Congress remained uncertain as counting continued. The 10-year Treasury yield fell four basis points to 4.919%, while the dollar index slipped 0.2% to 101.7 in earlier trading.
Meanwhile, Brent crude was around $103.85 a barrel after falling about 1% on Tuesday to a near four-week low. Markets are weighing diplomatic efforts to end the conflicts in Iran and Ukraine against the risk that further attacks disrupt supplies.
