The dollar exchange rate is breaking local highs
The dollar is gaining a lot of value as former President Donald Trump beats Kamala Harris by 2 percentage points in a national FOX News poll, which is making his latest statements about confrontational policies on China and Russia increasingly attractive to investors.
Thus, Deutsche Bank analysts see the potential for the dollar to strengthen further and, consequently, for strong declines in the EUR/USD rate.
- We see that the dollar is growing on all currency pairs and this is directly related to the presidential elections scheduled for November 5 this year in the US. The election of Kamala Harris means maintaining the current status quo and further selling of the dollar, while the unpredictability of former President Trump should definitely strengthen the American currency. We expect that by the November elections the EUR/USD rate may test another important support in the area of USD 1.075, unless something unexpected happens along the way - Deutsche Bank experts explain.
According to economists, Trump's victory will be associated with an increase in the yields of US bonds, the introduction of new tariffs and fiscal stimulus in the form of tax cuts. As a result, the dollar will appreciate in value.
– By comparison, if Harris wins and the Democrats gain control of Congress, we advise buying emerging market currencies and selling the dollar – Deutsche Bank experts point out.