USD: A Republican clean sweep to fuel dollar strength, higher yields – MUFG


Former President Donald Trump is on his way to the White House again with remaining votes in Pennsylvania not enough to lead to Harris taking a state that is looking essential for a road to the White House for the Democrats. With Pennsylvania lost Associated Press has just called the election for Trump, MUFG’s FX analysts note.

Trump wins with FX reaction as expected so far

“EUR/USD is now 1.9% lower and we see scope for this drop to extend further lower from here. If anything this election result is looking closer to a landslide relative to how close this election was anticipated to be. The figures look to be showing Trump winning over 300 electoral college votes that will be a huge endorsement of the policies he has been campaigning on. Trump won 304 electoral college votes in 2016 but a key difference in 2024 is that Trump is on track to win the popular vote which will reinforce Trump’s determination to implement the policies he campaigned on.”

“We are reportedly going to hear from Tump soon which may come prior to an official call on his victory but that won’t matter on this occasion. Harris has indicated she will not speak to the nation until tomorrow when she will of course be conceding defeat. We indicated in our FX Outlook in October and November that a Trump victory would lead to a potential 7-8% stronger US dollar relative to the forecasts if Harris won. That implied EUR/USD dropping below the 1.0500-level (to around 1.0300-1.0400) by the end of this year.”

“We also suggested a possible initial gain for the dollar over the first 24hrs of 2-3% and the DXY as of now is up close to 1.9%. What kind of speech Trump gives when he speaks this evening may provide some sign of initial policy focus but there is no reason not to believe that he will focus on tax cutting policies (if the Republicans win the House); trade tariffs and deportations. All inflationary and all therefore likely to lift yields and the US dollar.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD treads water just above 1.0400 post-US data

EUR/USD treads water just above 1.0400 post-US data

Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.

EUR/USD News
GBP/USD remains depressed near 1.2520 on stronger Dollar

GBP/USD remains depressed near 1.2520 on stronger Dollar

Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.

GBP/USD News
Gold keeps the bid bias unchanged near $2,700

Gold keeps the bid bias unchanged near $2,700

Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.

Gold News
Geopolitics back on the radar

Geopolitics back on the radar

Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.

Read more
Eurozone PMI sounds the alarm about growth once more

Eurozone PMI sounds the alarm about growth once more

The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures