Dollar tumbles broadly on market jitters over pre-election uncertainty: Nov 2, 2016

Market Review - 01/11/2016   23:35GMT  

Dollar tumbles broadly on market jitters over pre-election uncertainty

The greenback dropped across the board on Tuesday on uncertainty around the U.S. Presidential election as tightening election race increased market jitters and investors awaited the Federal Reserve rate decision.  
  
Versus the Japanese yen, although the greenback rose from Asian low at 104.67 to an intra-day high at 105.12 in early European morning after the Bank of Japan announced no new measures to its monetary policy, price pared its gains and retreated to 104.79 at New York open before tumbling to session lows of 103.81 as U.S. stocks fell sharply.  
  
In his press conference, BoJ Governor Haruhiko Kuroda said 'Japan economy likely to expand moderately ahead; CPI likely to accelerate to 2% around fiscal 2018; board member Sato, Kiuchi said 2% inflation won't be met during forecast period; to continue yield curve control as long as needed to meet inflation target; to adjust policy as needed to meet inflation target; to adjust policy as needed to meet inflation target.'  
  
The single currency traded with a soft bias in Asia and retreated to 1.0959, however, price pared its losses and rallied to an intra-day high at 1.1034 in European morning on dollar's weakness together with active cross-buying of euro especially vs sterling, price later rallied to a 2-week high of 1.1069 before easing.  
  
The British pound rebounded from Asian low at 1.2211 and briefly rose to an intra-day high at 1.2281 in tandem with euro. However, cable swiftly pared its gains and dropped to session low at 1.2206 at New York open on cross-selling of sterling before moveing narrowly in New York session.  
  
In other news, ESM's Regling said 'Greece cud start returning to mkts next year if it sticks to reforms; growth in Europe still below potential, sees this as challenge along with Brexit; banking union shud be completed n European deposit scheme is needed eventually.'  
  
On the data front, In a report, the Institute for Supply Management said its index of purchasing managers inched up to 51.9 last month from a reading of 51.5 in September. Analysts had expected the manufacturing PMI to rise to 51.7 in October.  
  
Data to be released on Wednesday:  
  
New Zealand unemployment rate, job growth, participation rate, inflation expectation, Australia building permits, Japan consumer confidence index, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, unemployment rate, unemployment change, Eurozone manufacturing PMI, U.K. shop price index, construction PMI, U.S. mortgage application, ADP employment change, ISM New York index and interest rate decision.