US Dollar Turns Weaker as Election Date Approaches
Arslan Butt • 1 min read
On Wednesday, the US dollar has dipped lower against major currencies as traders turn cautious ahead of next week’s presidential elections, even as the rise in coronavirus cases across the US and other parts of the world dent the market sentiment. At the time of writing, the US dollar index DXY is trading around 93.12.
The US dollar has come under pressure as markets anticipate a contested election as Democrats and Republicans disagree on the issue of vote counting, heightening worries that the presidential election’s outcome could be disputed by either side. Such a tussle would adversely impact the outlook for the greenback and turn it weaker, denting its appeal as a safe haven, reserve currency.
In addition, President Trump’s recent statements about the fiscal stimulus are also exerting downward pressure on the US dollar. Trump has admitted that the coronavirus relief package may not get approved before the November 3 elections, which could further delay the release of financial aid to prop up the economy.
Meanwhile, the Euro has weakened against the US dollar amid emerging news reports about the French government looking at bringing back a nationwide lockdown to contain the recent surge in coronavirus cases. Later today, the French President Emmanuel Macron is scheduled to address the nation and expectations are high that he could be announcing fresh lockdowns across the country.