US: The Harris-Trump debate – Commerzbank
11.09.2024, 11:55

US: The Harris-Trump debate – Commerzbank

Since it is such a dominant topic this morning, there’s no point in completely ignoring the debate between the US presidential candidates. However, the effect on the currency market was minimal at best, Commerzbank’s Head of FX and Commodity Research Ulrich Leuchtmann notes.

The effect on the currency market is minimal at best

“As I write this, the US Dollar (USD) is trading no weaker than 0.2% against the G10 average than it was last night. And even this mini-reaction is more likely a consequence of the yen strength (see above) than USD-idiosyncratic. AUD and NZD lost similarly. Of course, it is not irrelevant who will be living in the White House from next year on.”

“However, it is becoming increasingly clear that it is not as easy as many had hoped: to take 2016 as a model. At the time, Trump's victory triggered USD strength. At the margin, this may also be the effect this time. However, in the event of a Trump victory, there would also be USD-negative risks: that he might this time (better prepared) significantly damage the Fed's independence, that he might damage the USD's dominance by wanting to impose it on other countries (instead of accepting that it is the result of uncoordinated decisions by countless traders and investors).”

“Even if we could already predict the outcome of the election today, it would be completely unclear what the appropriate USD reaction would be. And so, it is only logical that the market cannot agree on a clear reaction to today's debate.”

 

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