Dollar Weakens as Kamala Harris Gains Traction in Final Election Countdown

On Monday, the US dollar weakened by 0.3% against major currencies, while Treasury yields rose as investors adjusted their expectations for the presidential election, particularly regarding Donald Trump.

A new poll indicated unexpected support for Democratic nominee Kamala Harris in Iowa, prompting market shifts. Barclays’ Mitul Kotecha noted a Trump-related premium had previously boosted the dollar, estimating it contributed to a 3% rise in the dollar index, which could decrease if Harris wins.

Betting markets have shifted, with Trump’s chances now at 54% on Kalshi and 58% on Polymarket, down from last week’s 64% and 67%.

This change reflects concerns that a Trump victory could lead to rising inflation, impacting the Federal Reserve’s interest rate decisions. The Fed is expected to cut rates by a quarter-point on Thursday.

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In the bond market, two-year Treasury yields fell to 4.18%, and ten-year yields dropped to 4.32%. Shares of Trump Media and Technology Group rose 12% after earlier losses, while the Mexican peso strengthened by 0.8% against the dollar.

Bitcoin also saw a slight drop to around $67,100, despite Trump’s pro-cryptocurrency stance. Despite this, the cryptocurrency managed to regain momentum and is currently tradign at around $69,000. Natixis economist Trinh Nguyen highlighted that uncertainty over tax rates has delayed investment decisions, emphasizing the election’s significant impact on the US economic outlook.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.