Investing.com – The U.S. dollar moved higher on Monday, maintaining recent strength as the U.S. presidential election draws closer and opinion polls suggest former President Donald Trump is increasingly likely to prevail.
At 04:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.2% higher at 103.462, after gaining about 0.6% last week. have booked.
Dollar boosted by Trump confidence
The dollar remained near its all-time highs for more than two months, boosted by growing belief that U.S. yields will fall at a slower pace than initially expected, especially as recent data showed the U.S. economy remained relatively healthy.
Stock traders have largely confirmed a 25 basis point interest rate cut by the Federal Reserve in November.
The dollar has also been boosted by increased expectations that Donald Trump will defeat Kamala Harris in the 2024 presidential election, which is less than two weeks away.
It is believed that Trump’s proposed tariff and tax policies will keep US interest rates high and undermine the currencies of trading partners.
“Forex markets appear to be positioning themselves for a Trump victory in next month’s US presidential election. October appears to have been a good month for Donald Trump in opinion polls and the dollar is receiving bids across the board,” ING analysts said in a note.
Euro hit by weak German PPI
In Europe, prices fell 0.1% to 1.0850 after German producer prices fell more than expected in September, down 1.4% year-on-year, instead of the expected 1.0%.
The European Central Bank is likely to cut its key interest rate to its “natural” level between 2% and 3%, but may have to cut it further if a decline in inflation takes hold, ECB policymaker Gediminas Simkus said on Monday.
“If the disinflation processes become entrenched… it is possible that interest rates will be lower than the natural level,” Simkus, the governor of Lithuania’s central bank, told reporters in Vilnius.
fell 0.2% to 1.3022 after data showed asking prices for UK homes rose just 0.3% in October, well below the average monthly rise of 1.3% for the month, according to property website Rightmove (OTC:).
This, together with the surprise fall in services inflation last week, points to successive rate cuts by the Bank of England in the coming months as the central bank tries to stimulate the UK economy.
The yuan falls after the PBOC cuts interest rates
rose 0.2% to 7.1120 after the PBOC cut its key lending rate by 25 basis points, with Monday’s cut coming amid a wave of recent stimulus from Beijing.
China last month announced its most aggressive round of stimulus yet, outlining both monetary and fiscal measures to support sluggish growth.
rose 0.3% to 149.91, but remained below 150 after briefly breaching that key level last week for the first time since early August.
