Dollar steady after Trump assassination attempt

15 Jul 2024

The Dollar remained stable on Monday, while cryptocurrencies surged as investors assessed the implications of the attempted assassination of former US President Donald Trump for his 2024 election prospects and the potential market impact.

In the wake of the shooting, investors increased the likelihood of a Trump victory. Historically, this expectation has strengthened the Dollar, as traders anticipated it would result in looser fiscal policies and additional trade tariffs.

However, the gains for the currency during Asia-Pacific trading hours were short-lived, as the market also concentrated on the monetary policy outlook, Reuters reports.

“There's still a lot of ground to be covered between now and November and a lot of uncertainty about what the Federal Reserve will do in the coming months,” said Jane Foley, senior FX strategist at Rabobank.

As it stands, markets are now fully pricing in a 25-basis point cut from the Federal Reserve in September as last week’s data revealed consumer prices declined on a monthly basis in June for the first time in four years.

“On one hand you have increased likelihood of the Fed cutting in September and on the other hand an increased chance of a Trump presidency which suggests the interest rate cycle could be quite limited,” Foley went on to say.

“You have these two opposing factors for the Dollar in the near term.”

The Dollar index, measuring the greenback against six rivals, was up under 0.1% at the time of writing at 104.10.

The Euro remained mostly unchanged at $1.0910 after reaching its highest level since March at $1.0921 earlier, while Sterling fell 0.1% to $1.2979.

In Japan, the Yen stood at 157.96 per Dollar, reversing some of last week’s gains, yet was not too far from a one-month high of 157.30 reached on Friday.

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