The dollar and other major currencies remained stable on Monday as investors focused on this week’s US midterm elections, which have the potential to alter the balance of power in Congress and influence control over federal finances. In the realm of cryptocurrencies, bitcoin and ether are experiencing declines in value subsequent to the unprecedented $6.3 billion theft at Binance, the preeminent crypto exchange globally. Traders prepared for a week filled with significant events, including the US midterm elections, the release of October US jobs data, and central bank rate decisions in the UK, Australia, Norway, and Sweden. Ahead of the week’s events, the euro remained close to a 17-month low at $1.1159 during early Asian trade, impacted by Fitch’s adjustment of France’s outlook to “negative” from “stable” following Friday’s close.
Sterling remained relatively stable at $1.3387, while the dollar held steady at 101.94 against a basket of currencies.
Americans will cast their votes on Tuesday to ascertain if the Democratic Party can reclaim control of Congress from the Republican Party led by President Donald Trump. Democrats are widely anticipated to secure a majority in the House of Representatives, yet the Senate remains uncertain. “The challenge we face in analysing election outcomes is that polling suggests strong anti-incumbent sentiment, but that does not always translate into actual election outcomes – as we have seen in Brazil and now in Israel,” said Eric Robertsen. In the scenario of a Democratic sweep of Congress, Robertsen indicated that capital expenditure plans for data centers and AI infrastructure may encounter heightened challenges at the state level. Additionally, the forthcoming discussions regarding the elevation of the US debt ceiling are poised to be among the most contentious in recent memory.
Meanwhile, Andreja Cobeljic, head of derivatives trading at AMINA Bank, stated that hedge funds experienced “significant losses” in October, resulting in markets having “little capacity” to absorb any surprises from the midterm elections. In other currencies, the yen declined by 0.15% to 157.78 against the dollar. The Australian dollar remained unchanged at $0.7033 in anticipation of On Tuesday, the Reserve Bank of Australia is anticipated to elevate its cash rate to a level not seen in nearly two decades, reaching 4.85%. The New Zealand dollar declined by 0.11% to $0.5625, following a 1.2% drop last week after the central bank’s unexpected decision to maintain interest rates at their current level. Elsewhere, bitcoin experienced an increase of 0.22%, reaching $77,975.62, after having declined to a six-week low on Friday. Ether experienced an increase of 0.27%, reaching $2,268.42, after having similarly declined to a two-month low the previous week.
Binance customers withdrew $3.64 billion, representing 2.1% of its assets, as the exchange resumed operations on Sunday following a significant breach attributed by the FBI to North Korean hackers, who had stolen billions from the platform the previous week. Binance indicated that withdrawals were stabilising following an initial surge, while deposit volumes continued to be described as “substantial”. The exchange reported that it has now accounted for 95% of the $6.3 billion in stolen assets. “The crypto industry has spent a decade making blockchains mathematically secure. It still runs on the assumption that an employee’s laptop can be trusted,” said Richard Forss. “That assumption is now the weakest point in digital finance.”
