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By Peter Nurse
Investing.com – The dollar gains positions at the start of trading in Europe on Tuesday, benefiting from the safe haven of uncertainty ahead of the US mid-term elections, which could change the political climate.
At 9:05 AM ET, the , which tracks this currency against a basket of six other majors, is up 0.2% at 110.241, recovering from weakness seen the previous day.
Attention is focused this Tuesday on the start of voting in the United States mid-term elections, after which Republicans are expected to take control of the House of Representatives, which could hinder the legislative agenda of President Joe Biden.
There is also concern that a conclusive result could take days to be officially recognized, given the heated US political climate.
In addition, “a divided Congress and President Biden focused on international issues such as trade could end up being slightly positive for the dollar,” say analysts at ING (AS:) in a note.
“The Biden Administration’s stance on Chinese trade has not been as accommodative as many hoped in 2020 and the recent tightening of restrictions in the semiconductor sector could set the stage for a tougher trade path in 2024.”
That said, the outcome could remain dollar negative if it leads to less fiscal stimulus.
The pair is down 0.2% to the 0.9995 level, moving back below parity ahead of the release of the latest Eurozone retail sales data for September.
Sales are expected to decline by , which is an improvement from , but still indicates strong pressure on discretionary spending in the region as investment continues to hit record levels.
The pair is down 0.4% to 1.1465, reversing some of the previous session’s gains, while the risk-sensitive is down 0.5% to 0.6446 after the Australian consumer confidence hit a two-year low, according to data released on Tuesday, due to rising interest rates and high .
The pair is up 0.2% to the 146.83 level, and data from the Ministry of Finance shows that Japan’s foreign exchange reserves continued to decline in October, after an unprecedented drop in the previous month, following the attempt by the Japanese authorities to support the battered yen.
The pair is up 0.4% to the 7.2555 level, as hopes fade that the Chinese government will scale back its Zero-Covid policy in the near future.
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