Markets hit pause yesterday ahead of the US election results, with USD easing slightly as traders squared up long dollar positions. We did see a brief dollar rally after US services data came in much stronger than forecast. However, the higher move proved to be short-lived, with all eyes fixed firmly on the race to the White House.
*Daily move - against G10 rates at 7:30am, 05.11.24
** Indicative rates - interbank rates at 7:30am, 05.11.24
Early election results coming in from key states are indicating a Trump win and have sent the dollar soaring up to 4-month highs.
The Chinese yuan and Eurodollar are bearing the brunt of the move as Trump has made no secret that he will enforce severe trade tariffs on all imported goods.
Were the Republicans to win a clean sweep by taking the Senate and the House, we anticipate further gains for the dollar. US interest rate and equity markets have firmed considerably overnight as Trump’s lower taxes, protective immigration, and trade policies are seen as acutely inflationary.
We await the official results.
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