NEW YORK: The dollar sank to its lowest level in over two months against a basket of peer currencies on Friday, as vote counting for the contentious US elections slowly moved toward a divided government and investors predicted more losses for the currency.
Investors are betting that Democrat Joe Biden will become the next president but Republicans will retain control of the Senate, which will make it difficult for the Democrats to pass the larger coronavirus relief package they have been pushing.
The need for more stimulus was underlined on Friday when the US government reported that employers hired the fewest workers in five months in October. It was the clearest evidence yet that the end of previous fiscal stimulus and exploding new coronavirus infections were sapping momentum from the economic recovery.
The dollar index fell against a basket of six major currencies to 92.461, hitting its lowest level since Sept. 2. For the week, the dollar index was down as much as 1.7%, on course for its biggest drop in almost four months.
The dollar fell further against the Japanese yen, trading at 103.58 yen on Friday, close to an eight-month low. The onshore yuan fell to 6.618 per dollar but still remained close to its more than two-year high reached on Thursday.
Many investors expect a Biden administration would slightly scale back Trump's trade war with China, which should benefit the yuan. Against a buoyant euro, the dollar traded at $1.1858 after falling 0.87% in the previous session.
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