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Dollar Rises as Debate Increases Bets on Trump’s Election Victory

Dollar Rises as Debate Increases Bets on Trump’s Election Victory

The dollar recorded a rise in Asian trading as the markets assessed that former president Donald Trump was the winner of the first US presidential debate.

Bloomberg’s gauge for the US currency rose as much as 0.2% on Friday 28 June before easing, with the index recording its sixth consecutive weekly gain. President Joe Biden stumbled in the first exchanges of the debate, a performance that could intensify concerns about his ability to defeat Trump in the November elections.

“Judging by the reactions so far, the markets think President Trump is ‘winning’ the debate,” said Carol Kong, a strategist at Commonwealth Bank of Australian in Sydney. “But it’s too early to draw a conclusion.”

Treasury yields rose, while US stock futures made a modest gain. The Mexican peso fell almost 1 per cent before paring its loss to 0.4 per cent. Asian currencies remained virtually stable.

Sentiment towards Asian shares was largely optimistic, with most regional stock markets advancing during the debate. Chinese benchmark indices recovered initial losses and moved away from technical correction territory, as the absence of hawkish comments on China was seen as a positive surprise by investors. The Hang Seng China Enterprises index rose as much as 0.8 per cent. It’s a “positive surprise for this part of the world, but only a moderate one,” said Redmond Wong, market strategist at Saxo Capital Markets. The political consensus on how to deal with China depends not only on the presidential candidates, but also on Congress, he said, adding that there could be an escalation of tensions in the coming months.

The absence of aggressive comments on China was “probably a surprise, but anti-China is a united, bipartisan position, so there’s probably not much to attack each other about,” said Xin-Yao Ng, chief investment officer at ABRDN.

Semanário Económico

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