Dollar still on the front foot as the election(s) draw nearer

The US dollar has continued to edge higher this week even in the absence of much economic data, suggesting that the gradual shift in the US election odds in favour of former president Trump continues to provide a tailwind for the greenback. With a week and half still to go until Election Day in the US, that theme will probably remain a key driver in the near term. While the perceived probability of a Trump win has increased over recent week, we think there is still ample scope for a further rally in the dollar should he win (and some of that repricing may come ahead of the election, if the odds continue to shift in his favour). On the flipside, a Harris win would at this point probably mean the dollar gave back some of its recent gains.