The US dollar hit its lowest level in more than three weeks against the euro, yen, Swiss franc and sterling on Wednesday on continued nervousness about a potential victory for US Republican presidential candidate Donald Trump next week.
Investors are rethinking long-held bets on a Nov. 8 victory for Democrat Hillary Clinton. Clinton held a 5 percentage point lead over Trump, according to a Reuters/Ipsos opinion poll released on Monday, but some other polls showed her Republican rival ahead by 1-2 percentage points.
The dollar index, which measures the greenback against a basket of six major rivals, fell about 0.4 percent to 97.26, its lowest since Oct. 11. The Mexican peso tumbled to a more than one-month low against the greenback of 19.4295 pesos per dollar on fears of a Trump victory.
Markets' assumption in the past month has been that the dollar would fall if Trump won. Clinton is viewed as the candidate of the status quo, while there is greater uncertainty over what a Trump victory might mean for US foreign policy, international trade and the domestic economy.
"There is a huge amount of unknown unknowns around Trump," said Richard Franulovich, a senior currency strategist at Westpac Banking Corp in New York. "That uncertainty is obviously anathema to markets."
The euro rose about 0.6 percent against the dollar to $1.1115, its highest since Oct. 11. The dollar sank 1 percent against the yen to 103.10 yen, its lowest since Oct. 10. The dollar plunged about 0.6 percent against the Swiss franc to 0.9695 franc, its lowest in roughly a month.
The Mexican peso suffered a more than 1-percent drop against the dollar for a second straight day. A possible Trump victory has been viewed as a key risk for the Mexican currency given the candidate's promises to clamp down on immigration and rethink trade relations.
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