USD: Damage limitation for the Republicans? - MUFG

Lee Hardman, Currency Analyst at MUFG, notes that the US dollar has continued to strengthen modestly in the Asian trading session supported by the reduced likelihood that Donald Trump will become the next President.

Key Quotes

“It has resulted in the dollar index rising to its highest level since late in July when it reached a high of 97.57 which provides the next key technical resistance level. The first nationwide poll since the release of “the audiotape” on Friday but before the second debate revealed that the audiotape has had a material negative impact on Donald Trump’s public support.

The NBC/Wall Street Journal poll revealed that Hillary Clinton’s lead among likely voters widened to 46% to 35%. In a head to head match up her lead widened further to 14 percentage points which is the largest gap recorded so far. If the initial negative impact is sustained, it could become a damage limitation exercise for the Republicans in the run up the Presidential election. Avoiding a President Trump shock should make the Fed more confident to resume rate hikes in December offering further support for the US dollar in the near-term.”