In this week’s update, TreasuryONE’s Wichard Cilliers and André Cilliers discuss the imminent US presidential election and its potential market impacts. With polls and betting markets indicating a tightly contested race between Kamala Harris and Donald Trump, both candidates offer differing economic policies that could shape the US dollar’s trajectory. Harris advocates for moderated fiscal policy with higher taxes for the wealthy, potentially easing inflation pressures and softening the dollar. Trump, however, may pursue tariffs and trade restrictions, which could drive a stronger dollar in the short term but add inflationary pressures over time.
An unresolved election result could heighten market uncertainty, especially if Trump disputes the outcome, potentially affecting the dollar’s stability. The team also mentions that businesses in Washington, DC, are preparing for possible protests, adding a layer of risk to the election’s aftermath. The Federal Reserve is set to announce its rate decision on Thursday, with markets largely expecting a 25 basis point cut in response to stabilising inflation and moderate employment data.
For the Rand, the trading range remains between 17 and 18 to the dollar. Volatility linked to the US election could prompt temporary movements towards either end of this range, particularly if safe-haven demand strengthens the dollar. TreasuryONE advises that any sharp changes in the Rand are likely to revert quickly, as the broader market digests both the election outcome and upcoming economic data.