The US Dollar’s (USD) pullback overnight was unsurprisingly shallow, given that US elections remain a key event risk and Trump-Harris are still polling quite tightly. DXY was last at 103.73, OCBC’ FX analysts Frances Cheung and Christopher Wong notes.

Daily momentum turns bearish

“CBS News’ most recent polling also shows the race as a toss-up in the 7 battleground states, including Pennsylvania, Michigan, Wisconsin, Nevada, Georgia, Arizona and North Carolina. That said, in the final PBS poll, Harris managed a 4-point lead over Trump, and this is a lead outside the poll’s 3.5-point margin of error. Between now and election outcome, we still expect election volatility to drive 2-way trades. On 6th Nov starting 7am (SGT), US election results should start to come in.”

“But the range of time zones across US means that some states on the west coast like Alaska and Hawaii will still be polling. Some states will also count votes more quickly than others but if the race is tight, then counting should continue and the winner may only be announced a few days later. In 2020, the result was only called for Biden 4 days later after Pennsylvania was confirmed while in 2016, Clinton conceded the morning after election day. One other point to note is that mail-in votes take longer to count as they need to be verified (vs. in-person voting) and this year is a record >80million of early votes being cast.”