Dollar holds up as traders await Fed rate hike clues
A report on demand for durable goods, such as cars and home appliances, due later in the day will be the latest indicator on the state of the world’s top economy, after the US central bank held off raising borrowing costs last week.
“The market is waiting on fresh direction, potentially from some Fed speakers tonight,” said David Forrester, a foreign-exchange strategist at Credit Agricole in Hong Kong.
“The dollar is likely to be subject to some temporary downside risk ahead of the US presidential election and will be especially dependent on the opinion polls,” he told Bloomberg News.
In Tokyo, the dollar advanced to 100.56 yen from 100.36 yen in New York late Tuesday, although it was still below levels seen in Asia earlier Tuesday.
The euro fetched $1.1206 and 112.68 yen, against $1.1217 and 112.58 yen in New York.
The dollar was supported after Hillary Clinton, who is favoured by markets, got the best of rival Donald Trump in the first US presidential debate on Tuesday.
Still, traders remain cautious a month ahead of the election.
“While yesterday’s spirited performance from both camps deserves recognition, the first presidential debate sharply exposed some vulnerabilities on both fronts,” Stephen Innes, senior trader at forex firm OANDA, said in a commentary.
“The barometer currencies (the Canadian dollar) and (the Mexican peso) will continue to make headlines as the ‘Trump’ premium grows and diminishes, but with four weeks to go before the ballot boxes open, we’re in for a protracted affair,” he added.
The peso on Wednesday was trading at 19.4335 against the dollar, strengthening from an all-time low of 19.9333 Tuesday before the debate started.
The billionaire Republican candidate’s campaign kicked off with an anti-Mexico slant, as he referred to migrants as “killers and rapists”.
Trump has vowed to cut off billions of dollars in remittances sent by migrants to Mexico to make their country pay for a massive wall along the border.
And he pledged to renegotiate the North American Free Trade Agreement between the US, Mexico and Canada if he wins.
The Canadian dollar, meanwhile, was down 0.22 percent.
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