From a market standpoint, the main risk posed by the US presidential election is a narrow win for one of the candidates ending up being contested, generating uncertainty and social unrest and further contributing to the degradation of an economy already battered by the coronavirus. This in turn would create the need for more Fed dovishness that would continue to weigh down on the Dollar.
Interestingly, the greenback recorded some gains versus other major currencies after a bitter debate between the two presidential candidates failed to deliver a clear winner. Such an outcome may be good news for Joe Biden, with his 8 points lead in the polls. A clear victory by one of the contenders on November 3rd would be the best possible outcome for the American currency.
