The US dollar is trading slightly higher against some of its currency peers one day before the 2020 presidential election. Investors are anticipating volatility across the broader financial markets this week, although the consensus on Wall Street is that investment houses desire a clear result for either President Donald Trump or former Vice President Joe Biden. Until then, the uncertainty surrounding Election Day could be beneficial for the greenback.
The final NBC News/Wall Street Journal poll on Sunday shows Biden with a ten-point advantage over Trump. But traders have less confidence in the polling data because of how a majority of the firms failed to predict a Trump victory four years ago, which had made it harder for investors to trade the market heading into the US election.
In the past, Biden has stated that things would fundamentally not change, except for who occupies the White House. However, since those comments, his running mate selection â Senator Kamala Harris (D-CA) â has made the stock market concerned about his policies. Plus, his recent stances on several positions, such as oil and gas, have also sparked some consternation in the financial markets. Market observers do note that he would offer a short-term injection since his administration would likely spend more on stimulus and relief.
President Trump, meanwhile, does offer a more business-friendly agenda. At the same time, investors do not enjoy the political turmoil in Washington and the erratic decisions in the Oval Office that have become the norm over the last four years.
Ultimately, it would be a toss-up as to who would be better for the financial markets and the economy.
The coronavirus pandemic is also weighing on both the US dollar and the election. The US reported nearly 100,000 single-day COVID-19 infections over the weekend, bringing total cases to approximately 9.29 million, with a death toll of 231,000. It is not only the US witnessing a resurgence, but many European nations are experiencing a second wave, resulting in stay-at-home orders, lockdowns, and tougher restrictions.
Data played a role, too, on Monday. The IHS Markit manufacturing purchasing managers’ index (PMI) rose slightly to a two-year high of 53.4 in October, led by gains in output growth, client demand, new order inflows, and employment. The Institute of Supply Management’s (ISM) manufacturing PMI climbed to 59.4 last month, led by new orders, prices, and employment.
Construction spending fell short of market expectations, rising 0.3% in September, down from 0.8% in August, according to the US Census Bureau.
The US Dollar Index, which gauges the greenback against a basket of currencies, rose 0.07% to 94.11, from an opening of 93.89.
The USD/CAD currency pair tumbled 0.65% to 1.3234, from an opening of 1.3328, at 19:26 GMT on Monday. The EUR/USD fell 0.09% to 1.1635, from an opening of 1.1678.
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