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The U.S. dollar strengthened against the Mexican peso and other major global currencies on Tuesday evening as voting began to close in the presidential election.
USD/USD gained 2.9% Mexican Peso It was also higher against the U.S. dollar shortly before 11 p.m. ET Swiss franc, yen and RMB. this ICE U.S. Dollar Index It rose 1.6%, hitting its highest level since at least July.
this EUR It fell to 1.0736 against the dollar, its lowest level since at least July 3.
The dollar’s gains extended as speculation grew that former President Donald Trump is leading Vice President Kamala Harris in the U.S. presidential election. To be sure, many states are too early to draw conclusions, or too close to drawing conclusions, according to NBC News.
Investors are paying close attention to the foreign exchange market as it is one of the most liquid markets that opens up as election results are announced.
“It will be critical to watch the dollar move tonight. This will be the most liquid and transparent information we have for the market to take action because people can quickly put money into this,” said Jefferies Chief Market Analyst David David Zervos said.
Traders widely expect a strong showing from Trump and Republicans in Congress could push the dollar higher. In theory, Trump’s proposal to increase tariffs on major U.S. trading partners would cause the dollar to strengthen.
“Trade taxes should increase domestic business activity and reduce U.S. imports,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Co. “We believe the effects should help more domestically oriented small-cap companies and lift US dollar exchange rate.
The U.S. dollar is generally stronger ahead of Election Day. The U.S. dollar index rose more than 3% in October but has fallen in recent days.
The dollar strengthened ahead of the election.
Chris Turner, ING’s global head of markets, said market participants appeared ready for a Trump victory.
Turner said of Democratic candidate and Vice President Kamala: “If there is not a red sweep, the bigger move in the foreign exchange market will be a lower dollar. Especially if Kamala wins, I think this will be the largest dollar decline. “I think the jury is still out on whether Trump wins the presidency, but Congress is divided. “
Elsewhere, GBP and Australian dollar Both fell more than 1% against the U.S. dollar.
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