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Dollar Edges Higher After Presidential Debate

ForexOct 23, 2020 03:04AM ET
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© Reuters.

By Peter Nurse

Investing.com - The dollar posted small gains in early European trade Friday, following the final presidential debate between U.S. President Donald Trump and Joe Biden before the Nov. 3 election.

At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.1% at 93.082, bouncing back from the seven-week low seen earlier in the week. However, it remains 0.6% lower for the week.

Elsewhere, EUR/USD was down 0.2% at 1.1793, GBP/USD fell 0.2% to 1.3054, while USD/JPY was down 0.1% at 104.72.

The final debate between the two presidential candidates took place in Nashville, Tennessee late Thursday and was more restrained than the chaotic first debate, with the debate centering more on policy rather than personal attacks.

That said, “people are just closing out longs ahead of the election just in case Biden isn’t [elected] … we’re coming into that eye of the storm now where it takes a bit of a brave soul to put on new positions ahead of the election,” Pepperstone head of research Chris Weston told Reuters.

Traders are also keeping an eye on negotiations between House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over the potential for a new substantive coronavirus relief bill, with Pelosi expressing optimism that a consensus could be reached.

“Market players will take their cue from U.S. political developments as well as the sustained acceleration in Covid-19 cases around the globe as the fall ushers in a new wave of infections as predicted by experts,” said analysts at ING, in a research note.

Elsewhere, USD/CNY was largely flat at 6.6843, with the yuan holding onto gains against the greenback as Wang Chunying, spokeswoman for China’s State Administration of Foreign Exchange, told a news conference that the yuan has been more stable than expected. This comes despite the Chinese currency reaching its highest level against the dollar in 27 months on Wednesday.

The Chinese currency could see sharp gains if Joe Biden wins November’s U.S. presidential election, according to Citigroup (NYSE:C) strategists. Chinese exporters would expect a more predictable U.S.-China trade relationship in that circumstance, and will start selling their dollar cash piles to buy yuan, the strategists wrote in a note dated Thursday.

Additionally, USD/TRY rose 0.2% to 7.9478, the day after Turkey’s central bank raised the upper bound of its interest-rate corridor but unexpectedly left its benchmark rate on hold.

The central bank surprised investors last month with a 200-basis-point increase and has since tightened policy further by restricting funding at the benchmark rate, forcing banks to borrow using costlier options. 

But this hasn’t stopped the currency’s decline, with the lira falling another 2% against the dollar since the September rate decision.

“Exchange rate developments are likely to remain as one of the key determinants of CBT policy in the period ahead given ongoing geopolitical issues and US elections-related sensitivities,” ING added.

 

Dollar Edges Higher After Presidential Debate
 

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Comments (4)
Bill Bauerband
Bill Bauerband Oct 23, 2020 2:31PM ET
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Trump might as well reserve the Uhaul now...
Andrew carson
Andrew carson Oct 23, 2020 7:10AM ET
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It's a NO for Joe 🚷
TL Chan
TL Chan Oct 23, 2020 5:26AM ET
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There would only be three possible scenarios of the election results:(1) Biden win, but then be arrested for treason crime, Trump take the presidency, and the other three of the corruption rectangle : Clinton, Hillary and Obama also be put in prison, (2) Biden play along but lose the election somehow in exchange for not being put in prison, with the rest of the corruption rectangle being included in the exchange condition or not wait to be known, (3) Trump simply win because American are clever enough to know what is good for America and then all those in the corruption rectangle got into prison, because these people have been destroying and weakening American for decades!
KaMaya King
KaMaya King Oct 23, 2020 4:23AM ET
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Trump will be elected.
Plopseven Schwartz
Plopseven Schwartz Oct 23, 2020 4:23AM ET
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Maybe as leader of his cell block
 
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