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FOREX: USD Surges Amid Likely Trump Presidency

FOREX
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The USD is up strongly, tracking for its best session since March 2020, as Donald Trump odds of becoming President firmed as US vote counting continues. 

  • Betting markets have Trump election odds very high, while Decision Desk HQ last had the Trump Presidency near 87% probability. The path for a Harris victory is a narrow one, relying on winning the three 'blue wall' states of Michigan, Pennsylvania, and Wisconsin.
  • Focus may switch to the House race, which Decision Desk HQ now has moderately in favor of the Democrats (see this link). This may explain some modest USD retracement from earlier highs. Our political risk analysts note this may be the only path for the Democrats to block a GOP sweep.
  • The USD BBDXY index was last up 1.3%, near 1.270.3. Earlier highs were at 1273.76, close to late June/early July highs for the index.
  • EUR has lost 1.5%, last near 1.0770 (earlier lows were at 1.0719). USD/JPY got to 154.33 in earlier trade but now sits back at 153.70. AUD/USD is off over 1.5% to 0.6535, fresh lows back to August of this year.
  • In EM FX, MXN is off around 2.9%, while CNH has lost over 1%, amid trade/tariff fears from a return of the Trump administration.
  • Cross asset signals are strongly in favor of the USD. US yields are up 10-15bps across the TSY benchmarks, with the curve steeper. The 10yr last at 4.42%, up 15bps.
  • US equity futures are up firmly, as well, +1.3%.
  • A clearer picture on the US election result should emerge as Wednesday continues. In terms of data, there are euro area final October services/composite PMIs, euro area September PPI and September German factory orders. The ECB’s Lagarde, De Guindos and Buch speak.
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The USD is up strongly, tracking for its best session since March 2020, as Donald Trump odds of becoming President firmed as US vote counting continues. 

  • Betting markets have Trump election odds very high, while Decision Desk HQ last had the Trump Presidency near 87% probability. The path for a Harris victory is a narrow one, relying on winning the three 'blue wall' states of Michigan, Pennsylvania, and Wisconsin.
  • Focus may switch to the House race, which Decision Desk HQ now has moderately in favor of the Democrats (see this link). This may explain some modest USD retracement from earlier highs. Our political risk analysts note this may be the only path for the Democrats to block a GOP sweep.
  • The USD BBDXY index was last up 1.3%, near 1.270.3. Earlier highs were at 1273.76, close to late June/early July highs for the index.
  • EUR has lost 1.5%, last near 1.0770 (earlier lows were at 1.0719). USD/JPY got to 154.33 in earlier trade but now sits back at 153.70. AUD/USD is off over 1.5% to 0.6535, fresh lows back to August of this year.
  • In EM FX, MXN is off around 2.9%, while CNH has lost over 1%, amid trade/tariff fears from a return of the Trump administration.
  • Cross asset signals are strongly in favor of the USD. US yields are up 10-15bps across the TSY benchmarks, with the curve steeper. The 10yr last at 4.42%, up 15bps.
  • US equity futures are up firmly, as well, +1.3%.
  • A clearer picture on the US election result should emerge as Wednesday continues. In terms of data, there are euro area final October services/composite PMIs, euro area September PPI and September German factory orders. The ECB’s Lagarde, De Guindos and Buch speak.