Gyrations in the $5.1 trillion foreign-exchange market waned and the dollar held its gain against the yen as opinion polls put Hillary Clinton ahead of Donald Trump before U.S. voters cast their ballots in the presidential election.
A JPMorgan Chase & Co. gauge of expected swings in global currencies fell the most since June on Monday, and one-week implied volatility in the world’s most-traded currency pair, euro-dollar, posted its biggest drop this year. The final Bloomberg Politics national poll before Tuesday’s election has Clinton ahead of Trump, 44 percent to 41 percent, when third-party candidates are included.
“The market sees a Hillary Clinton victory as dollar-positive while a Donald Trump victory as negative,” said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank AG in Frankfurt. “It’s doubtful that dollar recovery will continue throughout the day though. The market has learned from the Brexit referendum — while Hillary is ahead in the polls, it’s too close to call.”
The Bloomberg Dollar Spot Index, which measures the U.S. currency’s performance against a basket of 10 major peers, was little changed as of 8:59 a.m. in London. It advanced 0.4 percent Monday, the biggest gain since Oct. 20, halting a six-day losing streak after the Federal Bureau of Investigation said it maintained the view that Clinton’s handling of her e-mails wasn’t a crime. The greenback was little changed at 104.47 yen, after climbing 1.3 percent Monday, the biggest increase since Aug. 26.
The JPMorgan gauge of global exchange-rate volatility was little changed at 9.71 percent Tuesday, after a drop on Monday that matched its biggest slide since June 28. One-week implied volatility in the euro versus the dollar was at 11.44 percent, after tumbling 3.19 percentage points the previous day, the steepest decline this year.
Clinton’s edge in the polls and the FBI statement have come as a relief to stock markets and reversed a flow to haven assets triggered by the agency’s announcement more than a week ago that it had reopened a probe into Clinton’s e-mail usage.