Investing.com– Most Asian currencies were muted on Thursday as investors awaited cues on more stimulus in China, while the dollar steadied at 2-½ month highs amid growing speculation over a second Donald Trump presidency.
Most regional currencies were nursing losses over the past week as traders bet that the Federal Reserve will cut interest rates at a slower pace, which bolstered the dollar.
Underwhelming signals on Chinese stimulus also dented sentiment towards regional markets.
Dollar steadies near 2-½ mth high as Trump trade picks up
The dollar index and dollar index futures fell slightly in Asian trade, retreating from their highest levels since early-August.
The greenback was buoyed by increased speculation that Trump will secure a second term, especially as prediction markets, such as crypto betting site Polymarket, showed him pulling ahead of Vice President Kamala Harris.
Recent media polls, however, showed Harris holding a small lead, with about three weeks left to the ballots.
Trump’s policies are expected to be inflationary, potentially boosting the dollar and Treasury yields. Trump told Bloomberg on Wednesday that he will increase trade tariffs and cut taxes, while coordinating more closely with the Fed.
The dollar was also buoyed by weakness in the euro, which fell before a European Central Bank meeting where the ECB is widely expected to cut interest rates later in the day.
Chinese yuan weak as housing stimulus briefing underwhelms
The Chinese yuan weakened on Thursday, with the USDCNY pair rising 0.1%.
