Dollar Weakens Amid Election

5 Nov 2024 , 10:19 AM

On the day of the U.S. presidential election, traders squared positions, and the dollar began Tuesday on the defensive after recent polls dampened some market expectations on Republican Donald Trump winning.

The U.S. currency, however, fell as much as 0.76% versus the euro overnight, hitting a three-week low, following a weekend poll that shown Harris with an unexpected lead in Iowa, a long-time Republican bastion. Polls continue to indicate that the race is close overall.

Although Polymarket still lists Trump as the frontrunner, Democrat Kamala Harris has seen an improvement in her odds on election gambling websites and leads by a little margin on PredictIt.

Financial markets and certain betting sites have been heavily swayed in favour of Trump’s victory in recent weeks. Analysts view Trump’s immigration and tariff policies as inflationary, which has caused the dollar to appreciate and U.S. Treasury yields to climb.

The dollar index, which compares the value of the currency to six major counterparts, including the euro, fell as low as 103.67 on Monday for the first time since October 21. As of 03:49 GMT, it was unchanged at 103.91. At 104.63 last week, it reached its highest level since the end of July.

In the previous session, the euro rose to $1.09145 for the first time since October 15 and was hardly moved at $1.0877. The dollar was trading at 152.365 vs the yen.

For feedback and suggestions, write to us at [e-mail]