Investing.com - The dollar fell against the euro and the yen late Friday amid heightened political uncertainty after the FBI said it would review more emails related to Hillary Clinton's private email use.
The report sparked fresh uncertainty over Mrs. Clinton’s election prospects ahead of the November 8 U.S. presidential election, amid fears over what a victory for Republican candidate Donald Trump might mean for the U.S.
EUR/USD jumped 0.82% to 1.0985 in late trade, while USD/JPY was down 0.52% to 104.72 from a three-month high of 105.52.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.62% to 98.31 after rising as high as 98.92 earlier.
The dollar had been boosted earlier in the day after a stronger-than-forecast preliminary estimate of U.S. third quarter economic growth supported the case for the Federal Reserve to hike interest rates in December.
U.S. gross domestic product expanded at an annual rate of 2.9% in the three months to September the Commerce Department said, after rising by 1.4% in the second quarter.
Economists had forecast growth of 2.5%.
The report also showed that U.S. consumer spending slowed to 2.1% in the last quarter, from 4.3% in the second quarter.
Despite the slowdown in consumer spending the report indicated the economy is on a strong enough footing to withstand higher interest rates.
The U.S. central bank raised rates for the first time in almost a decade in December.
The Fed’s next meeting is next week, but a rate hike ahead of the presidential election is seen as unlikely.
Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors.
Investors currently price a 68% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
In the week ahead, investors will be looking to Wednesdays Fed policy statement for fresh hints on the timing of the next rate hike. Markets will also be looking ahead to Friday’s U.S. nonfarm payrolls report for October.
Central bank meetings in the U.K., Japan and Australia will also be in focus next week.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
The euro zone is to release preliminary data on third quarter growth and an initial estimate on inflation.
The U.K. is to produce data on net lending.
The U.S. is to publish reports on personal income and expenditure and business activity in the Chicago region.
Tuesday, November 1
China is to publish official data on manufacturing and service sector activity, as well as the private sector Caixin manufacturing index.
The Reserve Bank of Australia is to announce its benchmark interest rate and publish a policy statement which outlines economic conditions and the factors affecting the monetary policy decision.
The Bank of Japan is also to announce its latest monetary policy decision and hold a post-policy meeting press conference.
The U.K. is to release data on activity in the manufacturing sector.
Canada is to produce the monthly report on economic growth.
In the U.S., the Institute of Supply Management is to report on manufacturing activity.
Wednesday, November 2
New Zealand is to publish its quarterly employment report as well as data on inflation expectations.
Australia is to report on building approvals.
The U.K. is to release data on activity in the construction sector.
The U.S. is to release the ADP report on private sector job creation.
Later in the day, the Federal Reserve is to announce its benchmark interest rate and publish what will be a closely watched policy statement.
Thursday, November 3
Financial markets in Japan are to remain closed for a holiday.
Australia is to release data on the trade balance.
The U.K. is to release data on activity in the service sector.
The Bank of England is to announce its benchmark interest rate. The policy announcement is to be followed by a press conference with Governor Mark Carney.
The U.S. is to produce data on factory orders and the Institute of Supply Management is to report on manufacturing activity.
Friday, November 4
Australia is to report on retail sales.
Canada is to release its monthly employment report and data on the trade balance.
The U.S. is to round up the week with the closely watched nonfarm payrolls report and data on the trade balance.