Bitcoin at 3-month high as Trump odds drive currencies

SINGAPORE: The cryptocurrency bitcoin hit a three-month high in early Asian trading on Monday and the dollar looked poised to extend its gains in markets counting down to the US presidential election in two weeks.

Pre-election polls show a growing chance of former President Donald Trump winning the Nov. 5 election and strengthening the dollar as proposed tariff and tax policies are seen as likely to keep U.S. interest rates high and weaken the currencies of trading partners.

Currency moves in major markets last week were driven by a heavy rate cut by the European Central Bank and strong U.S. data that dispelled expectations of how quickly U.S. interest rates can fall, particularly if Trump wins the presidency.

The yen JPY=EBS was down 0.1% at 149.32 per dollar, remaining on the stronger side of 150 per dollar, having briefly breached that level last week for the first time since early August.

The dollar index = USD index against major rivals was at 103.45. It fell 0.3 percent on Friday as risk appetite rose sharply in markets after China announced more details on its broad economic stimulus package, but posted gains of 0.55 percent for the week. The euro was steady at $1.0866 EUR= and sterling GBP=D3 was also steady around $1.3045.

Bitcoin was boosted by improved prospects for Trump as his administration is seen taking a softer line on cryptocurrency regulation. Last up 0.8% at $69,400 BTC= and is up 18% since October 10.

With no major economic events expected this week, the market will focus on corporate earnings and US election risk and possibly rising costs to hedge against the dollar and other portfolio risks, said Chris Weston, head of research at the Australian online stock exchange. pepperstone company. note.

“With just 15 days to go until the US election, traders need to decide whether now is the right time to start making pre-election trades with more conviction,” Weston said.

The clearest way to express the Trump tariff risk was to be dollar long against the euro, Swiss franc and Mexican peso MXN=, he said.

Brad Bechtel, global head of FX at Jefferies, also noted that the rise in real interest rates has helped the dollar continue, particularly against those three currencies.

“We expect this trend to continue directly into the election and if Trump wins, likely beyond,” Bechtel wrote.

Last week, the yen fell 0.3%, the euro 0.6%, sterling was flat and the dollar index climbed 0.55%. The Mexican peso MXN= fell 3%.

The euro EUR=EBS is down more than 3% in three weeks and has retreated to its 200-day moving average and is parked near a 2-1/2-month low.