The first TV debate between Clinton and Trump took place last night. The following report looks at some of the commentary and the impact on the US Dollar.

Clinton and Trump clash in fiery televised debate

Sterling fell to fresh lows against the USD during yesterdays trading due to the 19 month low in mortgage approvals, but the Pound started to recover some of its lost ground during the afternoon as the much anticipated first presidential debate between Donald Trump and Hilary Clinton approached. The first televised debate between the pair didn’t fail to live up to the hype, and the early reaction is that Clinton came out on top during the exchange.

She questioned why Trump was so reluctant to release his tax returns, mocked him on his claims that global warming is a Chinese ‘hoax’ and slammed his ‘racist behavior’, including his spreading of birtherism – the conspiracy theory that Barack Obama was born outside the US.

Trump hit back by claiming that Clinton ‘doesn’t have the look and she doesn’t have the stamina’ to be President, whilst questioning her political record and ability to negotiate trade deals. Overall though, Clinton seemed the best prepared and most comfortable of the two, with a CNN poll following the debate finding that 62% of viewers thought Ms Clinton won. We have seen the Dollar weaken ever so slightly since and I believe that as the election race hots up we will be in for further volatility, with the next debate on Tuesday 4th October.

Will the Fed raise rates in 2016?

The Election aside, the other hot topic as far as US Dollar rates are concerned is the timing of the Federal Reserves next interest rate hike. Although the Fed missed an opportunity to hike rates just last week, Janet Yellen claimed that this was not due to a lack of confidence in the economys performance and that she expected to see a hike this year. The greenback strengthened towards the end of last week as a result and we could see further Dollar strength if data on Thursday mirrors Yellens bullish comments.

GDP is set to show an improvement whilst jobless claims may also follow suit. If there are continued improvements in the economy then we may well see that rate hike in 2016 which would see GBPUSD exchange rates drop dramatically in my opinion. There will be a speech from Yellen in the evening and also addresses from a number of other Fed officials, which could give some insight in to future policies and are likely to create US Dollar volatility.

The US Dollar has started to react to the upcoming US elections and those looking to buy or sell the US Dollar should get in touch with us if you wish to discuss your requirements. Call our friendly team on 01494 725 353.

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