The first presidential debate is set to shake up the elections campaign. Markets will move on implications for a new fiscal relief package, Yohay Elam, an analyst at FXStreet, explains.
More:
A decisive Democratic victory to hit the USD – Nordea
Views on China aligned whoever is next president – ANZ
Key quotes
“If Biden is perceived as the winner, Republicans could conclude that they must do everything to impact the Supreme Court as they would lose their chance after the election. That would further lower the chances of further relief. In this scenario, markets would retreat, drag gold down with them, and the only winner would be the safe-haven dollar.”
“If Trump wins the televised encounter and improves his chances of re-election, there is a greater probability that Senate Majority Leader Mitch McConnell and his colleagues would devote more time to boosting the economy and their chances of holding onto the upper chamber. In this case, the greenback could fall while stocks and gold would shine.”
“Apart from the next stimulus bill, markets prefer certainty. Trump's recent refusal to commit to a peaceful transition of power means that a close election could trigger a constitutional crisis and perhaps violence on the streets – an unfavorable outcome for investors. Representative Alexandra Ocasio Cortez, and Senators Bernie Sanders and Elisabeth Warren scare Wall Street. A Biden win in the debate raises the chances for a clean sweep by Democrats, allowing left-leaning lawmakers to push their agenda, a scenario markets dread. However, an inconclusive election is worse than AOC yielding more influence, even for markets.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD deflates to three-day lows around 1.1130
The euro remains under heavy pressure on Friday, with EUR/USD retreating toward the 1.1130 level to hit new three-day troughs. Despite a weaker reading in the U-Mich index in May, the US Dollar found support as inflation expectations ticked higher.
GBP/USD slips back to 1.3250 on USD-buying
GBP/USD recedes to the mid-1.3200s on Friday session, as the Greenback regains ground against the broadeer risk-linked universe. Supporting the upside in the US Dollar comes a rise in US consumer inflation expectations, according to the latest data from the U-Mich survey.
Gold looks depressed below $3,200
Gold reversed course on Friday, falling sharply below the $3,200 mark after Thursday’s strong rally. The retreat came as a resurgent US Dollar and easing geopolitical tensions weighed on demand for the safe-haven metal. Furthermore, XAU/USD remained under pressure and is on track to log its biggest weekly loss of the year.
Is Ethereum's comeback real?
Ethereum price hovers above $2,500 on Friday after soaring nearly 100% since early April's bottom. The ETH Pectra upgrade has boosted over 11,000 EIP-7702 authorizations in a week, indicating healthy uptake by wallets and dApps.
Trump’s Middle East dealmaking blitz: What does it mean for investors?
President Donald Trump’s May 2025 Middle East visit has unleashed a flurry of mega-deals, aimed at deepening U.S. trade ties, correcting trade imbalances, and reinforcing America’s leadership in defense and technology exports.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.