# Dollar catches breath while investors await midterms; cryptos skittish
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-09
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Dollar steadies on U.S. election results and inflation data
Meta Description: Stay informed about the latest updates on the dollar's performance amidst U.S. elections and inflation outlook. Don't miss out on crucial insights!
URL: https://financedigest.com/dollar-catches-breath-while-investors-await-midterms-cryptos-skittishhtml

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By Tom Westbrook

SINGAPORE (Reuters) – The dollar steadied on Wednesday as traders waited on results from U.S. elections and on [inflation data](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") that could disappoint hopes for the interest [rate outlook](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"), while cryptocurrencies were on edge as a major exchange faces a bailout.

The greenback has been under downward pressure from bets on the Federal Reserve [easing back on interest rate rises](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis") and on China reopening and driving growth.

It touched multi-week [lows against the euro](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low"), Australian dollar and New Zealand dollar overnight, then edged off those levels during the Asia session.

The [dollar last traded at $1.0071 per euro](https://www.financedigest.com/pound-hits-10-month-peak-euro-up-as-dollar-under-pressure.html "Pound hits 10-month peak, euro up as dollar under pressure") and bought 145.66 yen, after briefly dipping below its 50-day moving average for the first time in nearly three months.

The U.S. dollar index, which is [heading for its best year in almost four decades](https://www.financedigest.com/analysis-consumer-boom-nearly-over-as-central-europe-heads-into-decade-of-peril.html "Analysis-Consumer boom nearly over as Central Europe heads into “decade of peril”"), is down about 1% so far this week and hovered at 109.65 on Wednesday.

We all know the dollar will probably turn at some point – when is the [big question,” said Bank](https://www.financedigest.com/big-bank-ceos-to-sell-lawmakers-on-relief-diversity-efforts-amid-economic-regulatory-challenges.html "Big bank CEOs to sell lawmakers on relief, diversity efforts amid economic, regulatory challenges") of Singapore currency analyst Moh Siong Sim.

My view is the pullback is consolidation, rather than the end of the dollar uptrend, and that’s because I think the Fed is still not done with the inflation fight unless the [data](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") really gives us comfort that inflation is about to ease off for good.

Early U.S. midterm-election results showed Republican wins, though the prospect of a nationwide “red wave” appeared to have dimmed. Some analysts [view likely Congressional gridlock as a slight negative for the dollar if it limits fiscal spending](https://www.financedigest.com/gamers-spend-twice-as-long-viewing-intrinsic-in-game-ads-compared-to-other-digital-channels-reveals-new-research-from-lumen-and-anzu.html "Gamers Spend Twice As Long Viewing Intrinsic In-Game Ads Compared To Other Digital Channels, Reveals New Research From Lumen and Anzu").

We expect Republicans to take [back the House](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output"), which should be enough to cause a gridlock in Congress,” said NatWest Markets rates strategist Jan Nevruzi in a note to clients.

As far as [market impacts](https://www.financedigest.com/railway-bearing-market-size-2021-key-manufacturers-industry-share-investment-opportunities-future-trends-market-impact-revenue-demand-and-analysis-by-forecast-2030.html "Railway Bearing Market Size 2021 Key Manufacturers, Industry Share, Investment Opportunities, Future Trends, Market Impact, Revenue, Demand and Analysis by Forecast 2030"), we do not think there would be a seismic shift – high levels of inflation already made the passage of further spending packages less likely.

Results could take days to emerge.

MORE TO DO

Looming on Thursday is U.S. [inflation data](https://www.financedigest.com/shares-steady-dollar-gains-ahead-of-u-s-inflation-data.html "Shares steady, dollar gains ahead of U.S. inflation data"). Economists [expect a slowdown in the pace of annual headline inflation](https://www.financedigest.com/dollar-drops-as-inflation-cools-more-than-expected.html "Dollar drops as inflation cools more than expected") to 8%, and an upside surprise could upset market hopes that the Fed is getting closer to finished with interest rate rises.

Although the [Fed may soon slow](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes") the pace of its tightening, there remains much more work to be done,” said analysts at ANZ Bank.

The [Australian dollar](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation") was below overnight highs and just under $0.65 at $0.6494 in afternoon trade in Tokyo. The New Zealand [dollar wobbled](https://www.financedigest.com/european-shares-hit-nine-month-high-dollar-wobbles-after-powell-remarks.html "European shares hit nine month high, dollar wobbles after Powell remarks") 0.3% lower to $0.5942.

Sterling held at $1.1539.

Cryptocurrency markets have had a wild few days, and were attempting to find a floor in the Asia session after crypto [exchange Binance announced](https://www.financedigest.com/gumgum-announces-industrys-first-100-brand-safe-ad-exchange.html "GumGum Announces Industry’s First 100% Brand Safe Ad Exchange") plans to buy rival FTX in a bailout. A surge in withdrawals had left FTX struggling.

FTX’s native [token was in freefall on Tuesday and bitcoin](https://www.financedigest.com/coinsource-launches-new-bitcoin-atm-software-readies-for-global-expansion-and-future-token-additions.html "Coinsource Launches New Bitcoin ATM Software; Readies For Global Expansion and Future Token Additions") lost about 10%. Bitcoin steadied at $18,350, but FTT fell another 5% to a new [two-year low](https://www.financedigest.com/stocks-hit-two-year-lows-sterling-comes-under-fire.html "Stocks hit two-year lows, sterling comes under fire").

(Reporting by Tom Westbrook; Editing by Bradley Perrett and Christopher Cushing)


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