Dollar-buying has dried up but there are no signs of profit-taking pressure ahead of tomorrow’s U.S. presidential election, keeping Monday’s gains in the dollar largely intact.
The dollar flew higher against the yen overnight when Federal Bureau of Investigation Director James Comey said there is no new evidence to prosecute Democratic presidential candidate Hillary Clinton for mishandling classified material while Secretary of State. USD/JPY posted a high of 104.62 but could not extend its momentum and has since flatlined near the high, still leaving the dollar with a respectable 0.42% gain.
EUR/USD fell to a low of 1.1025 to leave a little bit of breathing room before the 23% Fibonacci retracement level at 1.101 (August 18 high, June 25 low). The 1.1025 level appears to have held in place, but the EUR/USD is now chopping below 1.104 for a loss of 0.21% for the euro.
On the flip side of dollar strength is the meteoric rise in the Mexican peso, currently 1.8% stronger against the USD bringing its three-day gain to +4.4%. For the remainder of the day, there doesn’t seem to be any room for the peso to trade higher than 18.60, but that could change as election results starting rolling in Tuesday (after the close). If a Clinton victory looks likely, the peso could rally to 18.00 against the dollar.