Asian session review: the US dollar is showing positive dynamics

During today's Asian trading, the US dollar rose slightly against major currencies, helped by higher yields on US Treasury bonds, as well as the growing chances of Donald Trump winning the presidential election, which will be held on November 5.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.09% to 103.58. Last week, the index added 0.58%, and recorded the third weekly increase in a row. Experts said that the US dollar is strengthening, as Trump's proposed tariff and tax policy is likely to keep interest rates high in the United States and put pressure on the currencies of trading partners. Since important economic data is not scheduled to be released this week, market focus will be on corporate earnings and U.S. election risk, and possibly a rise in costs to hedge dollar and other portfolio risks.

The Australian dollar fell 0.3% against the US dollar, despite the news from China (Australia's main trading partner). The central bank cut interest rates again as economic growth slowed further amid persistent deflationary pressures. The Central Bank of China cut its one-year loan prime rate to 3.10% from 3.35%. The five-year LPR, the benchmark for mortgage rates, was lowered to 3.6% from 3.85%. The bank had previously lowered the rates by 0,1% in July. The head of the Central Bank said that the Bank may further cut the reserve requirement ratio by 0.2%-0.5% at appropriate time, depending on market liquidity by the end of the year. According to experts, although additional policy easing is likely to follow in the next quarter, this is unlikely to significantly increase demand for loans, and more extensive fiscal measures will be required for a significant turnaround in economic growth.