FOREX-Dollar dips ahead of US midterms; bitcoin stabilises after crypto heist

The dollar eased ‌and ​the euro rose on Monday as investors braced for a packed week dominated by the US midterm elections and central bank rate decisions in Britain, Australia, Norway and Sweden. In cryptocurrencies, bitcoin and ether rebounded slightly following last week's ‌record $6.3 billion heist at Binance, the world's largest crypto exchange.

Traders were also watching developments in the Middle East, as growing hopes for a diplomatic resolution to the US-Iran conflict sent Brent crude futures down 3.9% on the day. The dollar was last down 0.3% to 101.63 against a basket of other major currencies, having ‌touched its lowest in a month earlier in the session.

"Risk is more on, the oil price is down and so it's slightly more risk-friendly, slightly ‌more dollar negative," said Kit Juckes, head of FX strategy at Societe Generale, pointing to some lightening of positions. Americans head to the polls on Tuesday to determine whether Democrats can wrest control of Congress from US President Donald Trump's Republican Party. Democrats are widely predicted to win the House of Representatives, but the Senate is more in doubt. October US jobs data is also ⁠due later ​in the week.

The euro rose 0.5% ⁠to $1.1212, shrugging off Fitch's revision of France's outlook to "negative" from "stable" after Friday's close. Sterling rose slightly to $1.3414, while the yen was slightly lower at 157.87 per dollar. Japan's real interest rates have risen ⁠recently, especially in the long- and super-long zones, the central bank said on Monday in a full version of its quarterly outlook report.

The Australian dollar weakened slightly to $0.7008 ahead of ​Tuesday's policy decision, where the Reserve Bank of Australia is widely expected to raise its cash rate to a near two-decade high of ⁠4.85%. Bitcoin was up 0.2% at $77,976.98, having fallen to a six-week low on Friday. Ether rose 1.3% to $2,291.57, having slid to a two-month trough last week.

Binance customers pulled $3.64 billion, or 2.1% of its assets, ⁠as ​the world's biggest crypto exchange resumed service after hackers stole $6.3 billion from the platform last week in a security breach that the FBI has blamed on North Korea. The exchange moved to reassure crypto investors and said withdrawals were stabilising after an initial spike and deposit volumes had remained "substantial" after what ⁠analysts believe may be the world's biggest financial robbery.

"While the incident delivered a shock to market confidence, it has not yet triggered widespread panic or a ⁠massive, concentrated withdrawal by users," said Tim ⁠Sun, senior researcher at HashKey Group. "On the one hand, the capital outflows likely include normal withdrawal and asset adjustment demands; on the other hand, some investors may not have transferred their funds to other exchanges, choosing instead to disperse ‌asset risks through self-custody wallets ‌or similar methods."