Investing.com - The dollar was lower against a basket of the other major currencies on Wednesday, extending losses into a second session as new polls indicated that the gap is narrowing between the U.S. presidential candidates ahead of next week’s election.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% to 97.52, the lowest level since October 13.
Polls on Tuesday indicated an increasingly uncertain outcome for the U.S. presidential election.
Many investors have been betting on a victory for Democratic candidate Hillary Clinton, but Friday’s announcement that the FBI is to review more emails related to her private email use while she was secretary of state cast fresh uncertainty onto the race.
The yen, which investors often buy during times of market uncertainty, gained ground, with USD/JPY down 0.55% at 103.57.
The safe-haven Swiss franc hit one-month highs, with USD/CHF down 0.44% to 0.9711.
The Mexican peso weakened against the dollar, with USD/MXN up 0.4% to 19.28.
The Mexican currency has been sensitive to developments in the election amid fears that a victory for Republican candidate Donald Trump could damage the country’s economy.
The euro strengthened, with EUR/USD rising 0.34% to 1.1093.
Meanwhile, investors were waiting the Federal Reserve’s latest policy decision later Wednesday, but a rate hike ahead of the November 8 presidential election is seen as unlikely.
Investors are currently pricing in a 64.3% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
But analysts have warned that the Fed could hold off on hiking rates if the election outcome sparks market volatility.
Market watchers were also looking ahead to Friday’s U.S. nonfarm payrolls report for October, which will be examined for signs that the economy is on a strong enough footing to handle an interest rate hike this year.