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16/07/24
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USD Inches Up on Possible Trump Victory
On Tuesday in early European trade, the U.S. dollar inched up from one-month lows as traders evaluated the increased possibility of former President Donald Trump being re-elected as well as the chances that the Fed would begin cutting interest rates in Sept.
The U.S. dollar index, which measures its strength against 6 other major currencies, traded up 0.1% at 103.952, after earlier in the week dropping to its lowest levels since July.
The dollar inched up after Donald Trump received an enthusiastic welcome on the first day of the Republican National Convention, a few days after he survived an assassination attempt on Saturday.
The 4-day convention will conclude on Thursday with Trump’s prime-time address when he will formally accept the party’s nomination to face President Joe Biden in a rematch of the 2020 election.
The attack has boosted expectations of a victory by Trump in the election in November – a scenario that may bolster the dollar as he has said he intended to enact more protectionist trade policies.
Analysts at ING said in a note that a stronger dollar seems to be driven by increasing bets on a Trump presidency after the events of last weekend. If markets continue increasing their Trump bets, there is a higher chance of wide pre-emptive positioning in the next few months.
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