The dollar records flagging performance in a volatile trading day.
The US dollar index, which measures the greenback’s performance compared to other major entities in the basket of currencies, notched a modest 0.05% increase to 93.490.
The Democratic party candidate is only 6 points short of the 270 electoral votes. If he reaches this benchmark, he will secure a seat in the White House.
His opponent, incumbent US President Donald Trump, trails behind with 214 points.
The gap is too narrow to call for a clear-cut victory. A contested election is highly likely as the leader is already seeking a recount in Penn and Michigan.
Such an event holds the world’s reserve currency from making big advances.
On the other hand, the Biden lead gave leverage to currencies that suffered from tariff restrictions imposed by the Trump administration.
Among the gainers on the lead are the Mexican peso and the US’ trade-war opponent Chinese renminbi.
According to analysts, the moves in the peso and yuan indicates that investors are trying to price in the context of a Biden victory.
The Mexican currency inched up by 0.9% earlier in the day, while the CNY/USD pair gained 0.11% to 6.6556. The market is keeping an eye on the movements of the onshore yuan.
The Democrat is expected to employ a softer tone towards trade policy, compared to what Trump adopted.
Elsewhere in Asia, the USD JPY pair fell by 0.15 to 104.33, while the Aussie followed suit after recording a 0.26% fall to 0.7154.
Across the Tasman Sea, the NZD/USD pair also inched down a conservative 0.09% to 0.6688.
Pound Drops Ahead of BOE’s Monetary Policy Announcement
The pound edged lower against the USD as the Bank of England is scheduled to announce the latest monetary policy later in the day.
The pair traded lower by 0.28% to 1.2848 in the latest foreign exchange charts.
Investors are growing weary of the central bank’s decision, anticipating the adoption of negative interest rates.
The country is currently traversing a tough road with the second wave of infections weighing the economy down.
Major business districts are under a month-long nationwide lockdown in an attempt to stop the spread of the virus.
Adding insult to the injury, the Brexit talks yet again encountered a difficult hurdle that pose risk to the passing of the post-transition trade deal.
Against the euro, the pound fell to 90.50 pence after falling to 0.22%.
- Trading Instrument