2020.11.0321:07:00UTC+00Dollar Loses Ground As Traders Eye Election Outcome, Fed Policy

The U.S. dollar was weak against most of its peers on Tuesday, ahead of the outcome of the U.S. Presidential election and the two-day monetary policy meeting of the Federal Reserve.

Markets are hoping that Democrat Joe Biden, if he manages to unseat President Donald Trump, will push for a bigger fiscal stimulus and take a freer approach to trade.

Biden is reportedly holding a lead in national polling and is also leading in several key swing states in the race to defeat Trump.

There is optimism that the results of the election will be known at the end of the night without the need for lawsuits and recounts.

The Fed, which commences its policy meeting on Wednesday, is likely to keep interest rates unchanged.

Data released by the Commerce Department this morning showed new orders for manufactured goods showed a significant increase in the month of September, rising by 1.1% after seeing in increase of 0.6% (revised) in August.

Economists had expected factory orders to rise by 1% in September compared to the 0.7% increase originally reported for the previous month.

The report said orders for durable goods spiked by 1.9%, while orders for non-durable goods rose by 0.3%.

The dollar index tumbled to 93.29 by late morning. After a modest recovery that resulted in a move to around 93.60, it retreated again and was last seen at 93.41, down 0.76% from Monday's close.

Against the Euro, the greenback weakened to $1.1723, giving up about 0.7%.

The Pound Sterling was stronger by 1.15%, fetching $1.3067 per sterling.

The Yen firmed up to 104.52 a dollar, rising more than 0.2%.

The Aussie was stronger by 1.6% with the AUD-USD pair quoting at 0.7167, compared to 0.7055 Monday evening.

The Swiss franc was stronger at 0.9121 a dollar, gaining 0.75%, while the Loonie was up 0.55% at 1.3144 a dollar.