Dollar Slips Ahead of U.S. Midterms; Treasury Refunding in Focus

The dollar edged lower as investors positioned cautiously ahead of Tuesday's U.S. midterm elections, with prediction markets seeing a Democratic sweep as the most likely outcome. Danske Bank analyst August Hyldgaard said a Democratic sweep would likely have a modestly positive impact on the broad dollar, while a divided Congress would probably trigger a very limited market reaction. The election coincides with the U.S. Treasury's Quarterly Refunding Announcement, which is expected to draw more attention than usual. A reduction to long-end issuance or an increase in long-end buybacks would weaken the dollar, Hyldgaard said. The DXY dollar index fell 0.1% to 101.811. In other market commentary, Capital Economics' Thomas Mathews said less-hawkish-than-expected monetary policy and the bursting AI bubble would give bonds a further boost over time. UOB economist Ho Woei Chen said China's centr