Yesterday afternoon, markets turned risk off and USD retreated as the Trump trade waned ahead of the presidential election.
GBP tracked the lower risk sentiment finishing broadly lower and JPY and CHF were the best performers amongst the G10.
*Daily move - against G10 rates at 7:30am, 05.11.24
** Indicative rates - interbank rates at 7:30am, 05.11.24
Markets have continued to be cautious going into election day, with many still calling it too close to call. Polls in the seven swing states close around 2 AM / 3 AM GMT tomorrow morning and markets may start to move from there.
As mentioned in yesterday's report, we will likely need a clean sweep for the Republicans if we are to see USD gain. This is due to general sentiment that a Republican win would mean more expansionary fiscal policy, which will add to fiscal stimulus and thus add to inflation.
In turn, markets will likely reduce the number of rate cuts expected by the Federal Reserve going forward. Should any other scenario unfold, we might witness a wave of USD selling as investors look to capitalise on the impressive gains the currency enjoyed throughout October.
ISM Services in the US are due in the afternoon but unlikely to have much impact.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.Have a great day.
