The Dollar Expecting More Losses on Continued Votes Count

The dollar stabilized against several currencies on Friday, but traders say it is likely to incur more losses as the controversial US presidential election dashes hopes of a major stimulus to support the economy anytime soon.

Investors are betting that Democratic candidate Joe Biden will become the next president, but Republicans will retain control of the Senate, making it harder for Democrats to pass a larger fiscal spending package than they have been seeking.

Biden maintains the lead against President Donald Trump, but the counting of votes is still ongoing in several important states and Trump is preparing legal objections to the vote count, so there is a high degree of uncertainty.

The dollar index settled against a basket of six major currencies at 92.641, near its lowest level in two weeks.

For the week, the index is down 1.5% and is heading for the largest decline in nearly four months. The dollar was trading at 103.46 yen today, near the lowest level in eight months.

Against the euro, the dollar traded at $ 1.1819, after dropping 0.87% in the previous session.

The pound traded at $ 1.3127, sticking to a large gain of 1.23% made on Thursday.

Some analysts say concerns about the US economy are increasing, which is a reason to expect the dollar’s decline to continue in the coming year. The rise in new coronavirus cases to record levels in some states may also hamper economic activity.

The yuan declined in internal trading slightly to 6.6307 per dollar, but it is still near its two-year high, which it reached on Thursday.

Many investors are expecting the Biden administration to slightly reduce the scope of Trump’s trade war with China, which would benefit the yuan.

The Australian dollar also fell against the US dollar after the country’s central bank said it was preparing to expand bond purchases to support the economy if necessary.