(Bloomberg) — The dollar fell as investors walked back bets on Donald Trump winning the US presidential election after weekend polls indicated Kamala Harris was gaining ground. Oil advanced after OPEC+ delayed an output hike.
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An index of the greenback dropped the most in more than a month, while the Mexican peso — which tumbled in the aftermath of Trump’s 2016 victory — was the top performer among 16 major currencies tracked by Bloomberg. US Treasuries rallied and European stocks rose.
Harris received some encouraging signals from an ABC News and Ipsos poll giving her a 49%-46% edge nationally against Trump in the race for the White House, while the New York Times/Siena survey released Sunday showed the Democratic nominee ahead in five of seven swing states.
A survey by the Des Moines Register that pointed to a lead for Harris in Iowa — a state that Trump has won in both of his previous contests — was a likely outlier, but served to underscore the ever-shifting dynamics of the race. Still, Harris’ advantage across all of the surveys was within the margin of error, and a NBC News poll released Sunday showed the race deadlocked 49%-49%.
The dollar gauge and 10-year Treasury yields both had reached their highest since July in recent weeks, after investors ramped up wagers on a second term for Trump. The argument goes that his support for looser fiscal policy and steep tariffs will deepen the federal deficit and fuel inflation, pushing up interest rates to the detriment of Treasuries but the benefit of the dollar.
“It’s impossible to call at this point,” Bill Maldonado, chief executive officer at Eastspring Investments, told Bloomberg TV. “We’ve heard Trump talking about tariffs and other measures, but do we really know what’s going to get implemented in what manner? It’s almost impossible to position for it.”
US futures edged higher after Wall Street’s gains Friday following robust earnings from the likes of Amazon.com.
Nvidia Corp. rose 2.5% in early trading after an announcement that the chipmaker will replace Intel Corp. in the 128-year-old Dow Jones Industrial Average. Intel dropped 2.2%, while Apple Inc. fell 0.5% after Warren Buffett’s Berkshire Hathaway Inc. continued its sale of shares in the iPhone maker.
In addition to the US election, trading across financial markets this week also will be shaped by central bank decisions for the US, UK and Australia, among others.
The Federal Reserve is expected to cut rates by 25 basis points Thursday, after the latest jobs data showed US hiring advanced at the slowest pace since 2020 while the unemployment rate remained low. Even so, the numbers were distorted by severe hurricanes and a major strike.
Economists also expect the Bank of England to lower its benchmark rate by a quarter point to 4.75%.
Oil, Gold
West Texas Intermediate, the US crude benchmark, rose almost 3% Monday as OPEC+ agreed to push back its December production increase by one month and Iran escalated its rhetoric against Israel.
In China, the country’s Standing Committee of National People’s Congress meets in Beijing Monday through Friday, as investors watch for any approval of fiscal stimulus to revive the slowing economy.
Key events this week:
India HSBC Manufacturing PMI, Monday
US factory orders, Monday
Eurozone HCOB Manufacturing PMI, Monday
China’s Standing Committee of National People’s Congress meets through Nov. 8, Monday
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