The US Dollar (USD) traded choppy last Friday. Payrolls surprised to the downside at 12k jobs (vs. 100k expected, 254k prior) while the 2-month net revision was -112k. Unemployment rate and average hourly earnings held steady at 4.1% and 4% y/y, respectively. Meanwhile ISM manufacturing slipped (46.5 vs. 47.6 expected) but prices paid surged to 54.8 (vs. 50 expected). DXY was last at 103.74, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

Tallying of the votes is expected to see USD trade choppy

“The Dolar Index (DXY) traded lower at first, but losses were pared and DXY traded higher into NY close. This morning, DXY opened and gapped lower. This is likely to have factored in the latest polling over the weekend – Harris closing the gap on Trump. Times/Siena poll showed Kamala Harris finding support in North Carolina, Nevada, Wisconsin and Georgia. Meanwhile Trump maintained an edge is Arizona while also improving in Pennsylvania – 19 electoral college votes.”

“In the betting market, Trump’s lead has narrowed significantly to 9.6ppts from high of 32.9ppts (29 Oct). Coincidentally (or not), the DXY also peaked around the same time and subsequently declined since then. Between now and election outcome, we still expect 2-way trades. Some of the build-up in USD gains seen in the last month may correct lower in the interim but given that Harris and Trump remain neck-and-neck even at this point, the pullback may also be shallow ahead of event day. Hence on decision day, FX price action may be asymmetric, depending on how much is being corrected between now and then.”