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The dollar is retracing some of its losses from trading yesterday, with US futures tracking lower ahead of European morning trade.
Fading stimulus hopes before the election is part of what is weighing on the mood in equities, though the bond market was more convinced that there will be something to work with after the election as yields pushed higher overnight.
The shove lower in the dollar is a tough one to make sense of, as it could be part of hopes for economic relief fading alongside stimulus talks but could it also reflect more election uncertainty and/or what is happening in the bond market?
Either way, the dollar is being stretched technically with EUR/USD keeping with a break above its 9 October high @ 1.1831 still while USD/JPY is seen under 105.00 though with large expiries layered closer towards 104.50 today.
GBP/USD saw a firm breakout to the topside as Brexit talks look set to resume, with price moving away from the recent trendline resistance but gains were limited by the 38.2 retracement level of the swing move lower in September at 1.3175.
Elsewhere, AUD/USD gained towards the 50.0 retracement level of its drop last week but the upside move stalled at that level and the 200-hour moving average, before sellers are keeping the near-term bias more neutral now closer to 0.7100.
For today, 'risk' seems to be looking more cautious to start the session with the dollar looking to reclaim some foothold. But let's see whether there will be any more twists and turns from Washington later in the day.
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