The U.S. Election Countdown – What To Expect
The market’s momentum now appeared to be somewhat stalling, as anticipation of the upcoming U.S. presidential election (November 5) and the Federal Reserve meeting (November 6-7) kept investors wary.
We will see increased volatility in the coming weeks!
! Upcoming U.S. elections (November 5)
The dollar has historically flexed its muscles in the run-up to U.S. elections, driven by rising safe-haven demand amid uncertainty about the election outcome—a pattern that could repeat itself in the coming weeks.
U.S. election countdown:
A Trump victory is likely boosting the greenback initially, while a Harris win may trigger short-term weakness, but experts warn against betting that any immediate post-result move will likely continue into 2025.
A Republican clean sweep, which smooths the path for more fiscal stimulus is seen as the most bullish for the greenback in the short term. In regard to monetary policy, Trump’s core policies on tariffs, immigration, and taxes would produce a more inflationary outlook in the U.S., diminishing prospects for aggressive Federal Reserve rate cuts over the cycle.
In the event of a divided government, a Trump presidency would still likely trigger an initial dollar rally but this scenario lacks the fiscal easing expectations that a clean sweep would bring.
A Democratic clean sweep, however, could lead to a “sling-shot path” for the dollar, with initial weakness potentially reversing in 2025 as markets price in different forms of fiscal stimulus.
A Harris presidency with divided government is viewed as the ultimate “status-quo outcome” and might see some initial dollar weakness but would likely not have lasting implications for the currency.
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