Unstable Start to the Week Before the U.S. Presidential Election, Signs of a Pullback with Dollar Selling Dominant
In the market at the start of the week, dollar selling is prominent as the U.S. presidential election approaches. A pullback has occurred in the “Trump Trade” dollar buying positions that had built up due to expectations of Trump’s lead, leading to continued weakness in the dollar.
The USD/JPY started with a gap down from around 153 yen at the close last week to around 152.60 yen, and further fell to approximately 151.60 yen. Short-term volatility has surged, with weekly volatility reaching the 18% range, the highest level since early August.
Additionally, the unexpectedly weak U.S. employment figures last weekend led to some dollar selling, but by the weekend, dollar buying regained dominance, resulting in a very unstable market. Moreover, the uncertainty surrounding the U.S. presidential election complicates the dollar’s performance further.
Key Economic Indicators and Events
Today, the following economic indicators and events are scheduled:
- Turkey’s consumer and producer price indices (October)
- Final manufacturing PMI for France, Germany, and the Eurozone (October)
- U.S. manufacturing new orders (September) and durable goods orders (September)
These indicators are relatively low in significance but could provide material for assessing market trends ahead of tomorrow’s U.S. presidential election. Additionally, speeches by the German Bundesbank president and the Austrian central bank president, the auction of U.S. 3-year bonds (58 billion USD), and earnings reports from AIG and Wynn Resorts will be released.
Future Outlook
Tomorrow marks the U.S. presidential election voting day. Election results are expected to influence the dollar market significantly, and the dollar may move sharply. In this phase, where the election outcome is deemed more critical than economic indicators, we plan to proceed with trading cautiously.
