Dollar Holds Steady Ahead of the Midterms as Bitcoin Reels From the Record $6.3 Billion Binance Heist
Currencies sat in a holding pattern on Monday as investors waited on Tuesday's vote for Congress and the federal purse strings, Reuters reported. Bitcoin steadied near $77,976 after a six-week low, while Binance said it has covered 95 percent of the $6.3 billion stolen in last week's heist.
The dollar and other major currencies were in a holding pattern on Monday as investors turned their attention to this week's U.S. midterm elections, which could shift the balance of power in Congress and control over the federal purse strings, Reuters reported. The euro languished near a 17-month low at $1.1159, weighed down by Fitch's revision of France's outlook to negative from stable after Friday's close. Sterling was little changed at $1.3387, while the dollar steadied at 101.94 against a basket of currencies. Americans head to the polls on Tuesday to determine whether Democrats can wrest control of Congress from President Donald Trump's Republican Party; Democrats are widely predicted to win the House of Representatives, but the Senate is more in doubt.
"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," said Eric Robertsen, global head of research and chief strategist at Standard Chartered. In the event of a Democratic sweep of Congress, Robertsen said, capital-spending plans for data centres and AI infrastructure could face increasing obstacles at the state level, while the next debate on raising the U.S. debt ceiling would be among 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 markets with little capacity to absorb any surprises from the midterm elections. The packed week also brings October U.S. jobs data and central bank decisions in the UK, Australia, Norway and Sweden; the yen eased 0.15% to 157.78 per dollar, and the Australian dollar was flat at $0.7033 ahead of Tuesday's expected Reserve Bank of Australia rise to a near two-decade high of 4.85%.
Cryptocurrencies were nursing their own shock. Bitcoin was up 0.22% at $77,975.62, having fallen to a six-week low on Friday, and ether was up 0.27% to $2,268.42 after sliding to a two-month trough last week, following the record $6.3 billion heist at Binance, the world's largest crypto exchange. Binance customers pulled $3.64 billion, or 2.1% of its assets, as the exchange went back online on Sunday after hackers the FBI links to North Korea stole billions from the platform last week. Binance said withdrawals were stabilising after an initial spike, deposit volumes had remained substantial, and it had now covered 95% of the stolen assets. "The crypto industry has spent a decade making blockchains mathematically secure. It still runs on the assumption that an employee's laptop can be trusted," said Richard Forss, chief technology officer at global prime broker EXANTE. "That assumption is now the weakest point in digital finance."
