Investing.com - The dollar fell to the day’s lows against a basket of the other major currencies on Tuesday as an ABC news poll showed Hillary Clinton a point behind Donald Trump ahead of the upcoming U.S. presidential election.
A poll conducted for ABC news showed that 46% of likely voters support Trump, compared with 45% for Clinton.
The poll showed that support for Clinton declined since the FBI said Friday it would review more emails related to her private email use while she was secretary of state.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.22% to 98.09, the lowest level since October 20.
The index gained 3% in October amid expectations for a December rate hike by the Federal Reserve, despite dropping last Friday amid the renewed controversy over Clinton's emails.
Investors were also cautious ahead of Friday’s U.S. jobs report for October, which will be scrutinized for signs that the economy is on a strong enough footing to handle an interest rate hike this year.
The Fed will make its latest monetary policy announcement later Wednesday, but a rate hike ahead of the November 8 presidential election is seen as unlikely.
Investors currently price a 73% 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 Mexican peso weakened against the dollar, with USD/MXN up 0.2% to 18.89.
The Mexican currency has been sensitive to developments in the election amid fears that a Trump victory could damage the country’s economy.
The dollar pared back gains against the yen, with USD/JPY last at 104.87, holding below last Friday’s three-month highs of 105.52.
The yen showed little reaction after the Bank of Japan refrained from unveiling fresh stimulus measures at the conclusion of its policy meeting earlier Tuesday, despite a warning on the inflation outlook.
The Reserve Bank of Australia also kept its interest rate unchanged at 1.5% on Tuesday and said it expects the economy to grow near potential over the next year.
AUD/USD hit highs of 0.7683 following the announcement, the highest level since last Wednesday.
The euro gained ground against the dollar, with EUR/USD advancing 0.45% to 1.1027.
Sterling was little changed after data showing that manufacturing activity in the UK maintained a solid rate of expansion at the start of the fourth quarter.
GBP/USD was at 1.2235, after rising to highs of 1.2281 overnight when Bank of England Governor Mark Carney said he would extend his term for an extra year, until Brexit negotiations have ended in 2019.