(Bloomberg) — The dollar fell as investors walked back bets on Donald Trump winning the US presidential election after the latest raft of polling data indicated no clear advantage for him. Oil rose after OPEC+ delayed a hike in output.
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An index of the greenback dropped the most in over two months, with the US currency down against major peers such as the yen, the euro and the Australian dollar. Treasury futures rose.
The moves came after a poll by the Des Moines Register showed Kamala Harris with a 47%-44% lead in Iowa — a state Trump has won in each of his prior elections. One element of the so-called Trump trade favors higher Treasury yields and a stronger dollar. Still, other surveys show the two candidates poised for a photo finish, with voters narrowly split both nationally and across the pivotal swing states.
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. There’s concern that his support for looser fiscal policy and steep tariffs will deepen the federal deficit and fuel inflation, undermining Treasuries.
“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.”
Shares rose in Asia, led by those in South Korea and China. US stock futures edged up after Wall Street’s gains Friday following robust earnings from the likes of Amazon.com and Intel Corp. Japanese markets are closed for a holiday, which means there will be no Treasuries trading in Asian hours.
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.
Oil, Gold
West Texas Intermediate, the US crude benchmark, rose more than 1% Monday, as OPEC+ agreed to push back its December production increase by one month and Iran escalated its rhetoric against Israel.
Gold nudged higher after retreating from a record high last week.
In China, officials unveiled steps to attract foreign money just days before US elections that have raised concern about the impact on the world’s second-biggest economy from a return of Donald Trump to the White House. Foreign individuals are now allowed to provide capital for publicly traded firms as strategic investors, the China Securities Regulatory Commission, the Commerce Ministry and four other regulators said in a statement late Friday.
Elsewhere 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
