Leading investment bank UBS remains bullish on the US dollar currency if Donald Trump wins the presidency in November. The bank wrote in its recent report that the market is contemplating a Trump victory against his viral Kamala Harris. However, opinion polls show a different perspective as Harris is beating Trump in the ballot box. While these are mere speculations, the exact result of the election will be announced on November 5, 2024.
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Currency: Higher Odds of the US Dollar Strengthening Under Trump Presidency
The recent data from UBS shows that the US dollar has a higher chance of strengthening in the currency markets under the Trump presidency. The former President is more focused on steering the USD on the right track than his rival Harris. “Higher odds of a Trump presidency are likely to be associated with a stronger USD near term,” said analysts at UBS.
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Donald Trump’s recent statements about his stance on developing countries ditching the US dollar have struck a chord with currency traders. He revealed that he plans to impose a 100% trade tariff if any country decides to stop using the USD. The development would force them to consider accepting the currency as a 100% tariff would hurt businesses and their economy.
The DXY index, which tracks the performance of the US dollar shows the currency at the 103.60 level. The USD has maintained the level this month with little to no dips in the indices. Moreover, the markets remain volatile as the election nears and investors are cautious about taking positions.
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The broader market is on a slippery slope as both Trump and Harris have drastically different views of the country. The next few weeks could throw up surprises in the charts and it’s best to avoid taking entry positions. The prospects of the US dollar and the economy will be decided by voters in November.