SINGAPORE, Oct 21 — Cryptocurrency bitcoin hit a three-month high in early Asia trading today and the dollar looked set to extend its gains in markets counting down to the US presidential election in two weeks.

Election polls show rising odds of former President Donald Trump winning the November 5 election and are boosting the dollar, since his proposed tariff and tax policies are seen as likely to keep US interest rates high and undermine currencies of trading partners.

Currency moves in major markets last week were driven by the European Central Bank’s dovish rate cut and strong US data that pushed out expectations for how fast US rates can fall, particularly if Trump wins the presidency.

The yen was down 0.1 per cent at 149.32 per dollar, staying on the stronger side of 150 per dollar, having breached that level briefly last week for the first time since early August.

The dollar index measure against major rivals was at 103.45. It fell 0.3 per cent on Friday as risk appetite picked up broadly across markets after China announced more details of its broad stimulus package but logged 0.55 per cent gains for the week. The euro stood flat at US$1.0866 (RM4.70) and sterling was also flat around US$1.3045.

Bitcoin got a lift from Trump’s improving prospects since his administration is seen as taking a softer line on cryptocurrency regulation. It was last up 0.8 per cent at US$69,400 , and has risen 18 per cent since October 10.

With no major economic events due this week, market focus will be on corporate earnings and US election risk, and possibly a rise in costs to hedge dollar and other portfolio risks, Chris Weston, head of research at Australian online broker Pepperstone, said in a note.

"With just 15 days to go until the US election, traders need to decide if now is the right time to start placing election trades with greater conviction,” Weston said.

The clearest way to express the Trump tariff risk was to be long dollars versus the euro, Swiss franc and Mexican peso , he said.

Brad Bechtel, global head of FX at Jefferies, also noted that rising real interest rates were helping the dollar along, particularly against those three currencies.

"We expect this trend to continue straight into the election and if Trump wins, likely well after the election as well,” Bechtel wrote.

Last week, the yen fell 0.3 per cent, the euro 0.6 per cent, sterling was flat and the dollar index climbed 0.55 per cent. The Mexican peso fell 3 per cent.

The euro is down more than 3 per cent in three weeks and has fallen through its 200-day moving average, and is parked near a 2-1/2 month low. — Reuters