Investing.com - The yen drifted slightly weaker in Asia on Monday ahead of trade data with markets sharpening focus on the U.S. presidential election as it hits the home stretch.
USD/JPY traded at 103.97, up 0.18%, while AUD/USD changed hands at 0.7606, down 0.04%. GBP/USD traded at 1.2219, down 0.11%.
Japan reports the adjusted trade balance for September with a surplus of ¥200 billion seen, and exports expected down 10.4% year-on-year and imports plunge 16.6%. Opinion polls suggest Hillary Clinton will win the U.S. presidential race against Donald Trump and is now working on whittling down the Republican majorities in both houses of Congress. The election falls on Nov. 8.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 98.62.
Ahead on Monday, euro zone members and the wider euro area are due to release flash PMIs for October and New York Fed head William Dudley and St. Louis Fed chief James Bullard are to speak.
Later in the week, is Friday’s preliminary reading on U.S. third quarter growth, which is expected to show a significant rebound from the sluggish second quarter.
The U.K. is also set to release its preliminary estimate of third quarter growth, due on Tuesday, the first such look at how the economy is preforming since the June 23 Brexit vote.
Last week, the dollar rallied on Friday, hitting its highest levels since early February amid heightened expectations that the Federal Reserve will hike interest rates before the end of this year.
The dollar strengthened after New York Fed President William Dudley said Wednesday the U.S. central bank will likely raise interest rates later this year if the economy remains on its current trajectory.
Growing expectations that Hillary Clinton will win the U.S. presidential election have also added to the view that a December rate hike is likely.
The Fed’s next meeting is in November, but a rate hike ahead of the presidential election is seen as unlikely.
Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors.
Investors currently price a 64% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
The dollar was also boosted as the euro weakened in the wake of Thursday’s European Central Bank policy meeting. ECB President Mario Draghi indicated that the bank may extend its stimulus program in December.