The dollar held steady as financial markets braced for a high-stakes U.S. presidential election, with polls indicating a razor-thin margin between Donald Trump and Kamala Harris. Investor anxiety over a potentially contested result has raised concerns that the final vote count could stretch on for weeks, increasing the likelihood of elevated market volatility in the interim. Adding to this week’s list of crucial events, the Federal Reserve’s policy decision on Thursday will be closely watched, with Chairman Jerome Powell expected to provide insights into the central bank’s future interest rate trajectory amid a precarious economic backdrop.
Across the Pacific, the Reserve Bank of Australia kept its benchmark interest rate unchanged at 4.35% as expected, generating limited market movement as investors anticipated the decision. In Japan, the yen eased against the dollar, while an extended trading session for Japanese stocks provided an extra 30 minutes of activity as market participants adjusted to new trading hours.
Commodities markets reflected the cautious sentiment, with gold prices stabilizing as traders braced for potential swings tied to the U.S. election outcome. Meanwhile, oil held its ground after a near 3% surge on Monday, driven by escalating Middle East tensions and OPEC+’s decision to extend supply curbs in a bid to stabilize prices amid global demand uncertainties. As the week unfolds, market participants are keenly attuned to developments from both the election and the Fed’s outlook, each carrying the potential to drive substantial market movement across asset classes.