AUD/USD May Retreat if Trump Covid-19 Infection Roils Markets

THIS WEEK IN THE FOREX MARKETS

AUD/USD May Retreat if Trump Covid-19 Infection Roils Markets

30 DAYS UNTIL THE US PRESIDENTIAL ELECTION

The election is now officially a month away, and political volatility has only been amplified. Following the first presidential debate, former Vice President Joe Biden’s popularity skyrocketed while President Donald Trump’s plunged. RealClearPolitics betting averages now show a 23.5-point spread, the widest in two months between the two candidates.

2020 US Election Betting Averages

Furthermore, Trump’s recent infection with Covid-19 has also contributed to Mr. Biden’s soaring popularity. The President frequently dismissed the severity of the virus and even attempted to chastise the Democratic nominee for wearing a mask at his rallies. A few days later, Mr. Trump announced that he was diagnosed with the virus and was later admitted to the Walter Reed National Military Medical Center.

While he is not incapacitated, his admittance to the hospital could undermine market confidence by virtue of the uncertainty of the situation. The Australian Dollar may retreat while the US Dollar may rise if market mood shifts to favoring liquidity over returns. On the other hand, Trump’s illness may boost Biden in the polls, which markets might welcome if they reckon that his policy approach might bring comparatively less-uncertainty. Read more...