Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Oct 30 - 12:55 AM

Danske: US Election Scenarios and EUR/USD Implications

By eFXdata  —  Oct 29 - 04:30 PM

Synopsis:

Danske Bank notes a strong correlation between EUR/USD and US election betting odds, with substantial movement likely depending on the outcome. A Trump win would likely drive EUR/USD lower, while a Harris victory could offer the euro temporary relief, although eurozone fundamentals remain a drag.

Key Points:

  • Betting markets have shown EUR/USD’s sensitivity to shifts in US election probabilities, with recent swings aligning with changes in candidates' odds.
  • A Trump victory, coupled with negative sentiment in the eurozone, could create a highly bearish scenario for EUR/USD, potentially driving a two-standard deviation move lower.
  • A Harris win could alleviate EUR/USD pressure as fears of new US import tariffs ease, though ongoing ECB rate cut expectations would limit EUR upside.
  • Regardless of the outcome, with betting markets at a 60% probability split, Danske expects a pronounced reaction in EUR/USD.

Conclusion:

Danske Bank anticipates a volatile EUR/USD response to the US election, with a Trump win potentially pushing the pair lower amidst eurozone concerns, while a Harris victory may offer temporary euro support. The alignment of political and economic factors suggests a multifigure move is plausible, underscoring EUR/USD’s sensitivity to the election’s outcome.

Source:
Danske Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2024 eFXdata · All Rights Reserved
!