Dollar Holds Tight Range Ahead of US Midterms as Bitcoin Recovers From Binance Heist

The US dollar and major currencies traded in narrow ranges on Monday as investors waited for Tuesday’s US midterm elections. Bitcoin and Ether recovered modestly after last week’s record $6.3 billion theft at Binance, the world’s largest cryptocurrency exchange.

Markets were also preparing for October US employment data and interest rate decisions from central banks in Britain, Australia, Norway and Sweden. The dollar index, which measures the US currency against a basket of major currencies, fell 0.15% to 101.83.

Euro and sterling under pressure

The euro remained under pressure and traded not far from a 17-month low, reaching $1.1182 in Asian trading. It was weighed down by Fitch’s decision to revise France’s credit outlook to negative from stable after Friday’s market close. Sterling was little changed at $1.3394.

Americans head to the polls on Tuesday to determine whether Democrats can take control of Congress from President Donald Trump’s Republican Party. Democrats are widely predicted to win the House of Representatives, although control of the Senate remains less certain.

Eric Robertsen, global head of research and chief strategist at Standard Chartered, said: “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.” Robertsen said a Democratic takeover of Congress could create greater obstacles for spending plans involving data centres and artificial intelligence infrastructure at the state level. He added that the next debate over raising the US debt ceiling could become one of the most contentious in recent history.

Andreja Cobeljic, head of derivatives trading at AMINA Bank, said hedge funds had suffered significant losses in October, leaving financial markets with limited capacity to absorb unexpected election outcomes.

Yen, Aussie and Kiwi move

The Japanese yen fell 0.1% to 157.73 per dollar. The Bank of Japan said in the full version of its quarterly outlook report on Monday that Japan’s real interest rates had risen recently, particularly in the long-term and super-long-term segments.

The Australian dollar slipped 0.15% to $0.7022 ahead of Tuesday’s monetary policy decision. The Reserve Bank of Australia is widely expected to raise its cash rate to a near two-decade high of 4.85%. The New Zealand dollar declined 0.26% to $0.5616, extending pressure following a 1.2% fall last week after the country’s central bank unexpectedly left interest rates unchanged.

Crypto recovers after Binance breach

Bitcoin rose 0.6% to $78,262.63 after falling to a six-week low on Friday. Ether gained 1.14% to $2,287.18 after reaching a two-month low last week.

Binance customers withdrew $3.64 billion, representing 2.1% of the exchange’s assets, following a security breach in which hackers stole $6.3 billion. The exchange resumed services and sought to reassure investors, saying withdrawals were stabilising after an initial surge. It also reported that deposit volumes remained substantial. The FBI has blamed North Korea for the attack.

Tim Sun, senior researcher at HashKey Group, said: “While the incident delivered a shock to market confidence, it has not yet triggered widespread panic or a massive, concentrated withdrawal by users.” He added that some withdrawals likely reflected normal customer activity and portfolio adjustments, while other investors may have moved their assets into self-custody wallets rather than transferring them to competing exchanges.

For Nigerian importers and consumers, the dollar index is the number to watch. It fell 0.15% to 101.83 in the reported session, but election results, US jobs data and central bank decisions could set the tone for the week.