US Dollar Weakens as Markets Await Large Stimulus After Elections

On Tuesday, the US dollar is trading close to the lowest levels seen in three weeks amid rising hopes for the US to finalize a large fiscal stimulus package soon after the upcoming elections in a few weeks. At the time of writing, the US dollar index DXY is trading around 93.15.

Even though President Donald Trump called off talks until after the November 3 elections, a huge round of stimulus to prop up the US economy seems inevitable. This has dented the demand for the US dollar and sent traders towards riskier currencies instead.

Investors are also increasingly expecting Trump to lose in the election and for Joe Biden to come to power, which is lending support to expectations for a large stimulus package that Democrats have been pushing for. Biden coming to power is expected to weaken the US dollar also because of his statements about hiking corporate tax.

The US dollar has also dipped against other safe haven currencies like the JPY and the CHF as markets continue to focus on the economic impact of the coronavirus pandemic. Meanwhile, the GBP is holding steady against the dollar as traders focus on the possibility of a Brexit deal getting finalized soon.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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