Wednesday, November 6, 2024

Dollar Weakens as US Polls Signal No Clear Leader: Markets Wrap


(Bloomberg) — The dollar fell as investors walked back bets on Donald Trump wining the US presidential election after the latest raft of polling data indicated no clear advantage for him. Oil rose after OPEC+ delayed a hike in output.

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An index of the greenback dropped the most in about six weeks, with the US currency down against major peers such as the yen and the Australian dollar. Treasury futures rose.

The moves came after a poll by the Des Moines Register showed Kamala Harris with a 47%-44% lead in Iowa — a state Trump has won in each of his prior elections. One element of the so-called Trump trade favors higher Treasury yields and a stronger dollar. Still, other surveys show the two candidates poised for a photo finish, with voters narrowly split both nationally and across the pivotal swing states.

The dollar gauge and 10-year Treasury yields both had reached their highest since July in recent weeks, after investors ramped up wagers on a second term for Trump. There’s concern that his support for looser fiscal policy and steep tariffs will deepen the federal deficit and fuel inflation, undermining Treasuries.

Shares rose in Asia, with those in Hong Kong and mainland China higher in early trade. US stock futures were steady after Wall Street’s gains Friday following robust earnings from the likes of Amazon.com and Intel Corp. Japanese markets are closed for a holiday, which means there will be no Treasuries trading in Asian hours.

“It’s basically impossible to predict the outcome at this juncture,” Homin Lee, senior macro strategist at Lombard Odier in Singaporem, told Bloomberg TV. The best thing to do is to “wait for the event to occur and then make a reasonable momentum decision.”

In addition to the US election, trading across financial markets this week also will be shaped by central bank decisions on interest rates for the US, UK and Australia, among others.

The Federal Reserve is expected to cut rates by 25 basis points Thursday, after the latest jobs data showed US hiring advanced at the slowest pace since 2020 while the unemployment rate remained low. Even so, the numbers were distorted by severe hurricanes and a major strike.

In Australia, Westpac Banking Corp. increased its share buyback to A$2 billion ($1.3 billion) and reported profit that beat estimates. The shares edged lower.



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