The dollar took a dip on Election Day.
The U.S. dollar took a dip on Nov. 5 as swarms of American voters took to the polls to cast their ballots.
The dollar declined even as betting markets like PredictIt and Polymarket indicated rising odds of Trump winning the presidency, Reuters reports. With Donald Trump returning to the White House with a Republican-led House and Senate, extreme currency moves are expected.
Trump’s policies on immigration and tariffs are expected to drive inflation, while tax cuts for the wealthy and deregulation could spur growth, pushing longer-dated Treasury yields and the dollar higher.
In contrast, a Democratic victory was anticipated to weaken the dollar as traders unwind bets on Trump, with investors concerned about the economic impact of higher taxes on the wealthy and stricter business regulations.
“Right now the mood seems to be going in favor of Trump,” Englander said. “On the other hand, for most of October and into the beginning of November, the Trump trades were stronger dollar and higher yields.”
Globally, Trump’s win could lead to weakness in the euro, Mexican peso, and Chinese yuan, as these regions may face new tariffs under his administration. Bitcoin rose 2.76% to $68,928, with Trump’s views seen as more favorable toward cryptocurrencies. Traders are closely watching the Federal Reserve’s two-day meeting, which concludes Thursday, with expectations that the U.S. central bank will lower rates by 25 basis points.
Elsewhere, data released on Tuesday revealed that the U.S. services sector reached its highest level in over two years in October, with a strong rebound in employment. This suggests that the near halt in job growth last month was an aberration.
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Source: Black Enterprise
