* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Updates prices)
By Karen Brettell
NEW YORK, Nov 2 (Reuters) - The U.S. dollar hit one-month
highs against a basket of peers on Monday and expected
volatility in major currencies rose to the highest levels since
April on investor jitters over the outcome of Tuesday's U.S.
presidential election.
The dollar has strengthened in the past week as risk
sentiment has soured, with investors reducing positions due to
uncertainty over the result.
“The move we saw last week was a pretty broad derisking and
I think that makes a lot of sense; people are naturally
skeptical about any sort of prognostication with regards to the
election after what happened four years ago,” said Erik Nelson,
a macro strategist at Wells Fargo in New York.
“The closer the election is, the more likely it is to be
delayed or contested and that's the perfect storm for risk
assets to go down,” Nelson added.
Democratic challenger Joe Biden leads in national opinion
polls, but the race looks close enough in battleground states
that President Donald Trump could win the 270 Electoral College
votes needed to win. Investors are also hesitant to trust polls after the
majority failed to predict Trump's victory in 2016.
The dollar index =USD was last up 0.05% at 94.15 after
earlier reaching 94.29, the highest since Sept. 29. The euro
EUR= dipped 0.13% to $1.1632 and the greenback climbed 0.11%
against the yen JPY= to 104.81 yen.
"Volatility is rising because liquidity for hedges around
the election is very thin. Everyone's the same way, there's no
one selling this stuff thinking everything's great," said Jordan
Rochester, forex analyst at Nomura. Generally, traders are
hedging for a decline for the euro and a rise for the dollar.
One-week implied volatility gauges for the euro EUR1WO=R
and the yen JPY1WO=R were both above 11%, the highest since
the beginning of April.
A surge in global coronavirus cases also weighed on
sentiment. In Europe, new COVID-19 cases have doubled in five
weeks, a Reuters tally showed, with total infections surpassing
10 million. The British pound also weakened after Prime Minister Boris
Johnson announced over the weekend a one-month lockdown across
England. Sterling fell as low as $1.2852 GBP= , the lowest since
Oct. 7. It was last trading at $1.2904, down 0.29% on the day.
The Federal Reserve will conclude its two-day meeting on
Wednesday. U.S. jobs data for October is also in focus on
Friday.
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Currency bid prices at 10:21AM (1521 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1632 $1.1647 -0.13% +3.76% +1.1656 +1.1623
Dollar/Yen JPY= 104.8100 104.6400 +0.16% -3.72% +104.9400 +104.5600
Euro/Yen EURJPY= 121.93 121.88 +0.04% -0.02% +122.1500 +121.7100
Dollar/Swiss CHF= 0.9192 0.9167 +0.27% -5.02% +0.9197 +0.9152
Sterling/Dollar GBP= 1.2904 1.2941 -0.29% -2.68% +1.2952 +1.2855
Dollar/Canadian CAD= 1.3259 1.3317 -0.44% +2.10% +1.3370 +1.3257
Australian/Doll AUD= 0.7046 0.7026 +0.28% +0.36% +0.7051 +0.6992
ar
Euro/Swiss EURCHF= 1.0695 1.0678 +0.16% -1.45% +1.0699 +1.0672
Euro/Sterling EURGBP= 0.9013 0.8994 +0.21% +6.61% +0.9049 +0.8996
NZ NZD= 0.6625 0.6616 +0.14% -1.65% +0.6634 +0.6590
Dollar/Dollar
Dollar/Norway NOK= 9.5621 9.5347 +0.29% +8.93% +9.6011 +9.5229
Euro/Norway EURNOK= 11.1250 11.1100 +0.14% +13.08% +11.1708 +11.0904
Dollar/Sweden SEK= 8.9133 8.8823 -0.06% -4.64% +8.9407 +8.8799
Euro/Sweden EURSEK= 10.3717 10.3783 -0.06% -0.93% +10.3875 +10.3400