The euro rose 0.4 percent to $1.0884 but faced resistance around $1.0905, while the dollar fell 0.7 percent against the yen to 151.81 yen. The dollar index decreased by 0.1 percent to 103.79.

Treasury futures gained 10 ticks, recouping some of the losses experienced on Friday.

Democratic candidate Kamala Harris and Republican Donald Trump are nearly tied in opinion polls, and the winner may not be known for days after voting ends.

While analysts believe Trump’s policies on immigration, tax cuts and tariffs will put upward pressure on inflation, bond yields and the dollar, Harris is seen as the continuity candidate.

Sellers said the dollar’s early decline may be linked to a reputable poll showing Harris with a surprising 3-point lead in Iowa, largely due to her popularity among female voters.

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“Since last week, Harris has been seeing a surge in polls highlighted by the Selzer Poll in Iowa, which some use as a gauge for performance among Blue Wall battleground states,” analysts at JPMorgan wrote in a note. he said.

Betting site PredictIT had Harris at 54 cents on the dollar to Trump’s 53 cents; just a week ago the rate was between 42 cents and 61 cents.

“It is widely accepted that a Trump win would be positive for the USD, but many feel this outcome is being discounted,” said Chris Weston, an analyst at broker Pepperstone. “A Trump presidency in which he would have full control over Congress could be very effective, as a strong sell-off in Treasuries could be expected to lead to a rise in the USD.”

“A Harris win and a divided Congress will likely cause a rapid reversal and price in of the ‘Trump trades,’” he added. “USD, gold, Bitcoin and US stocks will likely decline.”

Uncertainty about the outcome is one reason why markets think the Fed will choose to cut interest rates by a standard 25 basis points on Thursday rather than repeat the massive half-point easing.

Futures point to a 99 percent quarter-point cut to 4.50 percent to 4.75 percent in December, with an 83 percent chance of a move of similar size.

“We plan to make four more cuts in a row in the first half of 2024 to a final rate of 3.25-3.5 percent, but we see more uncertainty about both the pace next year and the final target,” said Goldman Sachs economist Jan Hatzius.

“Both our fundamental and probability-weighted estimates are now slightly more dovish than market pricing.”

The Bank of England is also expected to meet on Thursday and make a 25 basis point reduction, while the Riksbank is expected to make a 50 basis point relaxation and Norges Bank is expected to remain on hold.

The Reserve Bank of Australia will hold its meeting on Tuesday and is expected to keep interest rates steady again.

The BoE’s decision was complicated by a sharp sell-off following last week’s budget by the Labor government, which also caused the pound to fall.

By early Monday, the pound had regained some of its losses, rising to $1.2963, just shy of last week’s bottom of $1.2841.

More stimulus is also expected from China’s National People’s Congress, which will meet from Monday to Friday.

Beijing is considering next week approving the issuance of more than 10 trillion yuan ($1.40 trillion) in extra debt over the next few years to boost its fragile economy, sources told Reuters last week.