(Bloomberg) -- The dollar fell for a fourth day, the longest streak since July, as the Federal Reserve prepares to make an interest-rate decision just under a week before voters elect the next U.S. president.
The U.S. currency slid versus most of its major peers on speculation Fed policy makers will emphasize that the path of future interest-rate increases will be gradual, even as they keep open the door to a December rate hike. A Bloomberg poll of independents showed Democratic nominee Hillary Clinton narrowly ahead of Republican candidate Donald Trump in a four-way race, fueling uncertainty.
"The association the market has with the dollar is that a rising Trump probability is actually a cause for a weaker dollar -- maybe because it reduces the chances of a Fed hike because of uncertainty," Daragh Maher, head of U.S. currency strategy in New York at HSBC Holdings Plc, said in an interview with Bloomberg Television.
The greenback's decline drove losses in 2016 to 2.6 percent as traders become more guarded on the path of the dollar with a gradual Fed. The losses have been exacerbated by uncertainty around the outcome of the Nov. 8 vote as the candidates hold starkly different views on trade policies, which may weigh on economic growth.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.4 percent as of 12:19 p.m. in New York. It last posted four straight declines in the period ended July 29. The currency jumped 2.2 percent last month, the biggest increase since May, as signs of economic strength pushed Treasury yields higher in anticipation of tighter monetary policy.
The dollar depreciated 1 percent to 103.16 yen, after reaching the weakest level since Oct. 10. It slipped 0.5 percent to 97.06 Swiss centimes, having tumbled 1.4 percent Tuesday, the steepest decline since June 3.
Election Watch
The Federal Bureau of Investigation's reopening of an inquiry into Clinton's use of private e-mail servers has revived the campaign of Trump, who has promised to scrap existing U.S. trade agreements. Trump is viewed less favorably by investors in part because of a lack of policy clarity and what's perceived to be greater unpredictability than his rival.
Likely voters who don't identify with either party represented 29 percent of the electorate in the last presidential election and now back Clinton over Donald Trump 39 percent to 35 percent in a head-to-head contest, the latest Purple Slice online poll for Bloomberg Politics shows.
Officials will keep policy steady Wednesday, according to economists surveyed by Bloomberg. A report Nov. 4 is forecast to show the U.S. added 175,000 jobs in October, compared with 156,000 the previous month.
The futures-based probability of a Fed hike by the end of December is 71 percent, compared with 73 percent a week ago. The calculations assume that the effective fed funds rate will average 0.625 percent after the next increase. The central bank raised its rate target in December 2015 for the first time in nearly a decade.
“It's been positioning around the election,” said Peter Dragicevich, a foreign-exchange strategist at Commonwealth Bank of Australia in London. “There's some chance the Fed could surprise with a change in language.”
--With assistance from Lilian Karunungan Lukanyo Mnyanda and Narayanan Somasundaram To contact the reporters on this story: Susanne Barton in New York at swalker33@bloomberg.net, Tatiana Darie in New York at tdarie1@bloomberg.net. To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net, Paul Cox, Michael Aneiro
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