Sydney: When the US is all set for elections on Tuesday, the dollar slipped in Asia on Monday as investors braced for a potentially pivotal week for the global economy, Reuters reported.
When the dollar dipped 0.3 per cent on the yen to 152.45 yen, the dollar index eased 0.3 per cent to 103.94. Meanwhile, the euro rose 0.4 per cent to $1.0876, though it faces resistance around $1.0905.
According to Reuters, both the presidential candidates, Donald Trump and Kamala Harris, remain virtually tied in opinion polls. Therefore, the winner might not known for days after the voting ends. However, analysts suggest that Trump’s policies on immigration, tax cuts, and tariffs would put upward pressure on inflation, bond yields, and the dollar, and they see Harris as the continuity candidate.
According to dealers, the early dip in the dollar could be because of a well-respected poll that showed Harris taking a surprise 3-point lead in Iowa, fuelled largely by the support for her from female voters.
Chris Weston, an analyst at broker Pepperstone, said that it is widely considered that a Trump win will be positive for the USD, though many feel this outcome has been discounted. A Trump presidency with full control of Congress could be most impactful, as one would expect a solid sell-off in Treasuries resulting in a spike higher in the USD, he said.
He continued that a Harris win and a split Congress would likely result in ‘Trump trades’ quickly reversed and priced out. The USD, gold, bitcoin and US equity would likely head lower, he added.