Increasing belief on the financial markets that Donald Trump will win the US presidential election next month has been strengthening the dollar, Bloomberg has reported, citing British multinational bank Standard Chartered.
Recent polls suggest that the Republican and his Democratic rival, Vice-President Kamala Harris, are tied with less than two weeks to go before the election.
According to the bank’s calculations however, 60% of the greenback’s gains in October are linked to growing wagers that the former president will win the November 5 vote, Bloomberg reported on Thursday.
“The dollar has strengthened along with the rising probability of a Trump win in betting markets,” the outlet reported, citing a note by Steven Englander, head of global G-10 FX research at British multinational bank Standard Chartered.
Markets are pricing a 70% chance of a Trump win, added Englander.
The world’s largest prediction platform, Polymarket, is attributing a near 64% probability that Trump will become the next US president.
According to market research project PredictIt, Trump has a 58% chance of winning the election.
The US national currency has risen by nearly 3% against the Euro in the past month, with Bloomberg reporting earlier that the greenback was on pace for its best month since 2022.
While the election race has reportedly been the main driver for the dollar, other factors include the resilience of the US economy and a strong US jobs report from earlier this month, noted Bloomberg.
Before the previous presidential election in 2020, markets expected that Joe Biden, rather than Trump, would win and offer fiscal stimulus. The expectations weakened the dollar in October of that year.
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