During today's Asian trading, the US dollar fell sharply against major currencies as recent opinion polls increased uncertainty about the results of the US presidential election, which will take place tomorrow.
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) fell by 0.48% to 103.79, reaching a 2-week low, as a well-respected poll showed Kamala Harris taking a surprise 3-point lead in Iowa, thanks largely to her popularity with female voters. But other polls indicate that Kamala Harris and Donald Trump remain virtually tied and the winner might not be known for days after voting ends. According to experts, Trump's policy on immigration, tax cuts and tariffs will increase inflationary pressure, as well as cause a rise in the US dollar and US Treasury bond yields, while Harris was seen as the continuity candidate. In addition, Trump's victory may also slow down the pace of monetary policy easing by the Fed. According to the CME FedWatch Tool, markets see a 100% probability of a 0.25% rate cut at the November meeting (compared to 95.8% a week earlier) and a 83.4% probability of a 0.25% rate cut in December (compared to 69.0% a week earlier).
The Australian dollar rose 0.45% against the US dollar amid expectations of more stimulus from China's National People's Congress, which is meeting from Monday through Friday. Recall that China is Australia's main trading partner. Investors are also preparing for a meeting of the Reserve Bank of Australia, the results of which will be announced tomorrow. Consensus estimates suggest that the interest rate will be maintained at 4.35%.