Oct 21 2024: The U.S. dollar gained ground on Monday, maintaining its recent strength as confidence grows over Donald Trump’s chances in the upcoming presidential election.
As of 04:30 ET (08:30 GMT), the Dollar Index, which measures the dollar against a basket of six major currencies, rose by 0.2% to 103.462, following a 0.6% gain last week.
Dollar Rises on Trump Optimism
The dollar remained close to its highest level in over two months, supported by expectations that U.S. interest rates will fall more slowly than previously anticipated, as the U.S. economy continues to show resilience.
According to CME FedWatch, traders are mostly expecting a 25 basis point rate cut from the Federal Reserve in November.
The greenback’s strength was further boosted by growing confidence that Donald Trump will defeat Kamala Harris in the 2024 election, now just under two weeks away. Trump’s policies, including tariffs and tax measures, are seen as likely to keep U.S. interest rates elevated while putting pressure on currencies of trade partners.
“FX markets appear to be positioning for a Trump win in the upcoming U.S. presidential election. October has been a favorable month for Trump in the polls, and the dollar is being bought across the board,” analysts at ING noted.
Euro Slips on Disappointing German PPI
In Europe, the euro dipped slightly, with EUR/USD down 0.1% to 1.0850, after Germany’s producer price index (PPI) fell more than expected in September, dropping 1.4% year-on-year versus the anticipated 1.0% decline. This weak data added pressure on the euro, contributing to its decline against the dollar.
