Donald Trump and Kamala Harris debated for more than 90 minutes yesterday over a number of key issues including abortion rights, immigration policy and the economy. Unlike the first presidential debate between Trump and Biden, where the latter came out as clearly defeated, this one was not interpreted as ending in any ‘knock out’ win. However, markets seem to have awarded Harris a victory on points, and a CNN poll showed 63% of voters thought Harris won the debate, ING’s FX strategist Francesco Pesole notes.

Trump win can keep a lid on USD gains

“In FX, a Trump win is associated with a stronger dollar, which is trading on the soft side across the board. In the EM space, Asian currencies are the best performers, which is a clear indication of Trump trades being scaled back. Interestingly, USD/CNY is only modestly lower and two key China proxy trades (AUD and NZD) are lagging other G10 currencies.”

“That may be a consequence of Harris opposing Trump’s universal tax plans but still sounding determined to maintain protectionism pressure on China. CEE currencies and the high-beta NOK are also moderately stronger, which could be associated with lower geopolitical risks associated with Russia-Ukraine under Harris. More details on FX sensitivity to US election topics can be found in our US election guide for the FX market.”