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I confirm my intention to proceed and enter this websiteOn Monday, the U.S. dollar index gapped down, slipping 0.34% as investors prepared for a potentially pivotal week for the global economy, with the United States selecting a new leader. Democratic candidate Kamala Harris and Republican candidate Donald Trump remain virtually tied in opinion polls, and the winner may not be known for days after voting concludes.
(US Dollar Daily Price Chart, Source: Trading View)
Analysts suggest that Trump’s policies on immigration, tax cuts, and tariffs could drive up inflation, bond yields, and the dollar, while Harris is seen as a candidate for continuity. Dealers attributed the early dip in the dollar to a well-regarded poll showing Harris unexpectedly leading by 3 points in Iowa, largely due to her popularity among female voters.
Conversely, a Trump win is generally viewed as positive for the USD, though many believe this outcome has already been priced in. A Trump presidency with full congressional control could be especially impactful, likely triggering a sell-off in Treasuries and a sharp increase in the USD. In contrast, a Harris victory and a split Congress could lead to a quick reversal of ‘Trump trades,’ with the U.S. dollar, gold, bitcoin, and U.S. equities potentially heading lower.
Uncertainty about the election outcome is one reason markets expect the Federal Reserve to opt for a standard 25 basis point rate cut on Thursday rather than another larger half-point reduction.
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