USD: Ahead of the Biden-Trump debate
This week, the currency market has mostly been dominated by a defensive stance, except the Australian Dollar (AUD), which has benefited from inflation. According to FX strategist Francesco Pesole at ING, the US Dollar (USD) is trading well against the entire G10.
Shaped by US PCE and the Biden-Trump debate, the FX environment
"Heavy jitters in carry MXN, BRL, and ZAR are taking the biggest hit in the emerging markets space." In contrast, the major story in FX is still a lower Yen. Before acting, Japanese authorities might let the USD/JPY continue rising, which would provide the Greenback with more support heading into tomorrow's major PCE event.
The third publication of the first quarter GDP and PCE, which is barely likely to move the market, is scheduled for today in the US. Additionally, there will be some attention paid to the anticipated decrease in May durable goods orders and unemployment claims. Even if initial claims were predicted to decline last week, there is cause for concern given the unexpected stickiness of continuing claims.
The USD might continue to have broad support today. The USD's response to tonight's first TV debate between President Joe Biden and Donald Trump (02:00 BST) will be closely watched. Because of his intentions for lower taxes, geopolitical position, and promises of protectionism, we assume that Trump is the most dollar-positive candidate.
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