NEW YORK- The dollar on Tuesday dropped from near last week’s two-month highs, as investors capitalized on recent gains in the greenback and cautiously looked ahead to the first debate between US President Donald Trump and Democratic challenger Joe Biden.
The US currency fell to one-week lows against the euro and Swiss franc, and dropped against commodity currencies such as the Australian and New Zealand dollars as well as the Norwegian crown.
“The debate is so much awaited because of all the political tensions going and also because economically both candidates have different visions for the country,” said Juan Perez, senior currency trader, at Tempus Inc in Washington.
“There is a lot more volatility on the domestic side than on the international side. Global sentiment is also a little better than that in the US and so it’s making sense that investors are moving away from the US dollar,” he added.
In afternoon trading, the dollar index fell 0.3 percent to 93.879, after hitting a two-month peak on Friday.
The greenback also added to losses, as investors felt a little more confident getting out of the safe-haven currency after data showed US consumer confidence rebounded more than expected in September, as households’ views of the labor market improved.
The dollar was also weighed down earlier by currency flows in the options market as well as for month end, said Erik Bregar, head of FX strategy at Exchange Bank of Canada in Toronto.