SINGAPORE Reuters - The dollar went up on Wednesday as traders waited for the results of the U.S. midterm elections and inflation data that could disappoint hopes for a slowdown in rate hikes, while the markets tried to steady after news of a bailout of exchange FTX.
The dollar is under downward pressure due to bets on the Federal ReserveFederal Reserve easing back on interest rate rises and China reopening and driving growth.
It touched a multi-week low on the euro, Australian dollar and New Zealand dollar overnight, then moved off those levels early in the Asia session.
The dollar was trading at $1.1006 per euro last week and bought 145.20 yen, which fell below its 50 day moving average against the yen for the first time in nearly three months.
The U.S. dollar index is heading for its best year in nearly four decades, but it is down 0.9% this week and hovers at 109.73 on Wednesday.
The dollar will probably turn at some point - when is the big question, said Moh Siong Sim, Bank of Singapore currency analyst.
I think the Fed is not done with the inflation fight because I think the pullback is more about the end of the dollar uptrend, and that's why I think the pullback is more of a drag on the economy and that's why I think the data gives us comfort that inflation is about to ease off for good. The early midterm-election results showed that several Republican senators had easily won the re-election. Investors expect Republican gains, and some analysts view Congressional gridlock as a negative for the dollar if it limits spending.
Results could take days to arrive. On Thursday, the U.S. inflation data is on the horizon. Economists expect a slowdown in the pace of annual headline inflation to be 8%.
Analysts at the ANZ Bank said that the Fed may slow the pace of its tightening, but there is still much more work to be done.
The Australian dollar was below overnight highs and just under $0.65 at $0.6496 in morning trade. New Zealand's dollar fell 0.1% to $0.5951.
After Binance announced plans to buy rival FTX in a bailout, the markets were trying to find a floor in the Asia session. A surge in withdrawals had left FTX struggling.
The native token of FTX was in freefall on Tuesday and lost 12%. The value of the digital currency was $18,398.