Greenback pulls back ahead of US midterms; Bitcoin stabilises after crypto heist

[LONDON/SINGAPORE] The US dollar eased while the euro rose on Monday (Nov 2), as investors braced for a packed week dominated by the US midterm elections and central bank rate decisions in Britain, Australia, Norway and Sweden.

In cryptocurrencies, Bitcoin and Ether rebounded slightly after a record US$6.3 billion heist at Binance, the world’s largest crypto exchange.

Traders were also watching developments in the Middle East, as growing hopes for a diplomatic resolution to the US-Iran conflict sent Brent crude futures down 3.8 per cent on the day.

The greenback eased 0.5 per cent to 101.45 against a basket of other major currencies, touching its lowest in a month.

“Risk is more on, the oil price is down and so it’s slightly more risk-friendly, slightly more dollar-negative,” said Kit Juckes, head of FX strategy at Societe Generale, pointing to some lightening of positions.

Americans head to the polls on Tuesday to determine whether Democrats can wrest control of Congress from US President ​Donald Trump’s Republican Party.

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Democrats are widely predicted to win the House of Representatives, but the Senate is more in doubt. October US jobs data is also due later in the week.

The euro rose 0.7 per cent to US$1.1234, shrugging off Fitch’s revision of France’s outlook to “negative” from “stable” after Friday’s close.

Sterling rose slightly to US$1.3445, while the yen was steady at 157.64 per dollar. Japan’s real interest rates have risen recently, especially in the long and super-long zones, the central bank said on Monday in a full version of its quarterly outlook report.

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The Australian dollar was little changed at US$0.7028 ahead of Tuesday’s policy decision, where the Reserve Bank of Australia is widely expected to raise its cash rate to a near-two-decade high of 4.85 per cent.

Bitcoin was up 0.5 per cent at US$78,184.11, having fallen to a six-week low on Friday. Ether rose 1.5 per cent to US$2,296.44, having slid to a two-month trough last week.

Binance customers pulled US$3.64 billion, or 2.1 per cent of its assets, as the world’s biggest crypto exchange resumed service after hackers stole US$6.3 billion from the platform in a security breach that the Federal Bureau of Investigation has blamed on North Korea.

The exchange moved to reassure crypto investors, saying that withdrawals were stabilising after an initial spike and that deposit volumes had remained “substantial” after what analysts believe may be the world’s biggest financial robbery.

Tim Sun, senior researcher at HashKey Group, noted that while the incident “delivered a shock to market confidence, it has not yet triggered widespread panic or a massive, concentrated withdrawal by users”.

“On the one hand, the capital outflows likely include normal withdrawal and asset adjustment demands; on the other hand, some investors may not have transferred their funds to other exchanges, choosing instead to disperse asset risks through self-custody wallets or similar methods.” REUTERS