The dollar and other major currencies were little changed on Monday as investors turned their attention to this week's US midterm elections, which could shift the balance of power in Congress and control over federal spending.
In the cryptocurrency market, bitcoin and ether recovered slightly after a record $6.3 billion heist at Binance, the world's largest cryptocurrency exchange, last week.
Traders were bracing for a busy week dominated by the US midterm elections, October jobs data and interest rate decisions by central banks in Britain, Australia, Norway and Sweden.
The euro remained near a 17-month low at $1.1182 in Asian trading, weighed down by Fitch's decision to downgrade France's outlook to “negative” from “stable” after Friday's market close.
Sterling was little changed at $1.3394, while the dollar fell 0.15% to 101.83 against a basket of currencies.
Americans will vote on Tuesday to determine whether Democrats can wrest control of Congress from US President Donald Trump's Republican Party. Democrats are widely expected to win the House of Representatives, while control of the Senate remains less certain.
“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, global head of research and chief strategist at Standard Chartered.
A Democratic sweep of Congress could create obstacles for spending plans on data centres and artificial intelligence infrastructure at the state level, Robertsen said. The next debate over raising the US debt ceiling could also be among the most contentious in recent history.
Meanwhile, hedge funds suffered “significant losses” in October, leaving markets with “little capacity” to absorb surprises from the midterm elections, said Andreja Cobeljic, head of derivatives trading at AMINA Bank.
The yen fell 0.1% to 157.73 per dollar. Japan's real interest rates have risen recently, particularly in the long-term and super-long-term segments, the Bank of Japan said on Monday in the full version of its quarterly outlook report.
The Australian dollar eased 0.15% to $0.7022 ahead of Tuesday's policy decision, with the Reserve Bank of Australia widely expected to raise its cash rate to a nearly two-decade high of 4.85%.
The New Zealand dollar fell 0.26% to $0.5616, after declining 1.2% last week following its central bank's surprise decision to leave interest rates unchanged.
Bitcoin rose 0.6% to $78,262.63, recovering after falling to a six-week low on Friday. Ether gained 1.14% to $2,287.18 after hitting a two-month low last week.
Binance customers withdrew $3.64 billion, or 2.1% of the exchange's assets, as the platform resumed operations following last week's security breach, in which hackers stole $6.3 billion. The FBI has blamed North Korea for the attack.
Binance sought to reassure investors, saying withdrawals were stabilising after an initial surge and deposit volumes remained “substantial” following what analysts believe may have been the world's largest financial robbery.
“While the incident delivered a shock to market confidence, it has not yet triggered widespread panic or a massive, concentrated withdrawal by users,” said Tim Sun, senior researcher at HashKey Group.
He said the outflows likely included routine withdrawals and asset adjustments, while some investors may have moved funds to self-custody wallets rather than other exchanges to diversify their risks.