The dollar fell as prospects of easing tensions in the Middle East pushed oil prices lower, while investors shifted their attention to Tuesday's US midterm elections. The Bloomberg Dollar Spot Index dropped 0.2%. Efforts to end the Iran conflict drove oil prices down, easing inflation concerns and pulling US Treasury yields lower. Geopolitical uncertainty and the US midterm elections could keep market volatility elevated, with external forecasts suggesting Democrats may gain control of at least one chamber of Congress. "Democrats will very likely tighten regulation of the artificial intelligence industry," said Alex Kuptsikevich, chief market analyst at FxPro, in a report. "This will add another reason for a tech selloff and deal a blow to 'American exceptionalism' as well as the dollar."
EUR/USD rose 0.3% to 1.1196. Irish central bank governor Gabriel Makhlouf said French politicians need to "get to grips" with the problems facing their country's economy and ruled out the possibility of the European Central Bank immediately stepping in to support the French debt market. GBP/USD gained 0.1% to 1.3407. According to a survey of 35 economists, the Bank of England is expected to deliver its first rate hike in more than three years on Thursday. USD/JPY rose 0.2% to 157.90. AUD/USD fell 0.4% to 0.7006. Australian government bonds declined as the Reserve Bank of Australia began its two-day policy meeting. USD/CAD rose 0.1% to 1.3981.
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