MARKET NEWS

Summary

• US dollar and major currencies trade in narrow ranges ahead of Tuesday's midterm elections.

• Democrats widely expected to win control of the House of Representatives, while the Senate race remains uncertain.

• Bitcoin and Ether recover modestly following last week's $6.3 billion security breach at Binance.

• Euro remains under pressure after Fitch revises France's credit outlook to negative.

• Investors prepare for US jobs data and central bank interest rate decisions in Britain, Australia, Norway and Sweden.

SINGAPORE, Nov 2 (Reuters) — The US dollar and other major currencies traded in a narrow range on Monday as investors turned their attention to this week's US midterm elections, which could shift the balance of power in Congress and influence control over federal spending.

In cryptocurrency markets, Bitcoin and Ether recovered slightly following last week's record $6.3 billion theft at Binance, the world's largest cryptocurrency exchange.

Investors were preparing for a busy week dominated by the US midterm elections, October employment data and interest rate decisions from central banks in Britain, Australia, Norway and Sweden.

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, while the dollar index, which measures the US currency against a basket of major currencies, fell 0.15% to 101.83.

US midterm elections in focus

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.

"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," said Eric Robertsen, global head of research and chief strategist at Standard Chartered.

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.

Meanwhile, 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 and Australian dollar weaken

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.

Cryptocurrency markets recover after Binance hack

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.

"While the incident delivered a shock to market confidence, it has not yet triggered widespread panic or a massive, concentrated withdrawal by users," said Tim Sun, senior researcher at HashKey Group.

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.

Reporting by Rae Wee; Editing by Lincoln Feast and Jamie Freed.