(Bloomberg) -- The dollar dropped against all of its major peers, while Treasury yields declined sharply, as traders pared bets on Republican Donald Trump prevailing in US presidential election. The yen and Swiss franc were among the best performers in the Group of 10.
- The Bloomberg Dollar Spot Index drops as much as 0.7%, the most since August, before trimming declines
- Among a flurry of polls, a survey by the Des Moines Register pointed to a lead for Vice President Kamala Harris in Iowa — a state that former President Trump has won in both of his previous instances. The survey could be an outlier, but points to the ever-shifting race dynamics
- “The Iowa poll is making people dial back the so-called Trump trades,” meaning betting on a stronger dollar and high Treasury yields as hedges against high spending and increased tariffs, said Helen Given, a foreign-exchange trader at Monex. “We won’t see a lot of more substantial weakness without any actual results”
- “In line with polls shifting in Harris’ favor, the dollar is under pressure,” said Skylar Montgomery Koning, a currency strategist at Barclays Plc in New York. “I would caution that both candidates are far from fully priced in FX, so on either outcome of this binary event we will likely see sizeable FX moves with the dollar appreciating on a Trump win and depreciating on a Harris win”
- USD/JPY falls as much as 0.96% to 151.54, traded down 0.8% at 151.74 later
- If Trump wins, “we expect USD/JPY topside to be limited at 160 due to intervention warning,” said Maximillian Lin, strategist at Canadian Imperial Bank of Commerce
- “Amid local holidays in Japan, USD/JPY continued to reflect external risks,” he said
- EUR/USD rallied 0.7% to 1.0906
- USD/CHF dropped 0.8% to 0.8631, touching lowest since Oct. 16
- Some information comes from an FX trader familiar with the transactions who asked not to be identified because the person isn’t authorized to speak publicly
Reporting by Anya Andrianova
