US Dollar Stays Strong as Focus Turns to Election Results
Arslan Butt • 1 min read
The US dollar is holding strong against its major rivals, especially the riskier currencies, as markets cautiously await the results of what appears to be a very closely contested presidential election. At the time of writing, the US dollar index DXY is trading around 93.86.
While early opinion polls had predicted an easy victory for Democrat Joe Biden, the results coming in so far point to a tight race between Biden and Trump. A possible victory or lead for Trump is sending currencies like the Chinese yuan and Mexican peso lower, as these nations were the hardest hit by Trump’s trade tariffs.
Trump’s possible lead is also strengthening the US dollar as it reduces the likelihood of the rollout of a large fiscal stimulus package. The safe haven appeal of the greenback also remains in focus amid rising uncertainty about what a close contest means for the US economy and global markets.
In case the results that come in today are too close to call a clear winner, market volatility could remain high for several days as it could take time for mailed in ballots to be counted. This could keep the US dollar bullish for the next few days.