Biden falters in debate as Trump claims victory, markets steady
The vast majority believed that Trump won the debate. However, we do not see major turbulence in the financial markets. The dollar remains strong, as do American indices, which are hitting new highs," observes analyst Grzegorz Dróżdż in a commentary for Conotoxia Ltd.
On Thursday, a long-anticipated presidential debate took place between the sitting president Joe Biden and former president Donald Trump. This event attracted the attention of millions of Americans who were hoping for concrete proposals regarding the future of the country and the economy.
"Turn right at the next intersection"
The debate, which took place overseas, was also reviewed by Grzegorz Dróżdż, an analyst at Conotoxia Ltd. (Invest.Cinkciarz.pl). He opens his commentary with a striking phrase: "Turn right at the next intersection – such words come to mind observing the events surrounding the elections in the world's largest economies," he writes. "The debate between Joe Biden and Donald Trump can be summarised by the fact that 67% of those surveyed considered Trump the winner," he adds. The commentary's author also claims, "Meanwhile, on the other side of the ocean, on Sunday, the first round of elections to the French parliament will take place, where for the first time in many years a far-right party may win."
"The debate could be crucial for Biden's presidency, as he appeared confused and disoriented. According to observers, his responses regarding the economy and immigration were incomprehensible. The vast majority of them believed that Trump won the debate. However, we do not yet see major turbulence in the financial markets as a result. The dollar remains strong, as do American indices, which are hitting new historical highs weekly," observes the analyst.
Absence of economic specifics
Dróżdż also emphasises that we did not hear any concrete proposals from either candidate regarding the future of the economy. "Instead, we witnessed numerous accusations and references to achievements of previous administrations. Therefore, it is currently difficult to predict what decisions either candidate will make. Nonetheless, the market seems to be softly pricing in a potential Trump victory," he points out.
"Investors perceive the potential victory of Marine Le Pen's National Rally in France, which consistently enjoys the highest support of 35% in recent polls, differently," the expert claims. He adds that "the coalition of left-wing groups can count on just under 30% of votes, while the centrist camp of President Emmanuel Macron is supported by one in five respondents."
The euro under election pressure
The analyst notes: "The poll results have caused the EUR/USD exchange rate to hover around 1.07. Uncertainty is also visible on the Paris Bourse. The main CAC40 index is falling for the third consecutive session today. In the scenario of a decisive National Rally victory, pressure on the euro will intensify, and EUR/USD may head towards the key 1.06 barrier."
"In such situations, it is also worth looking for opportunities because, according to the popular market saying 'buy the rumour, sell the fact,' it may turn out that after the elections, there will be an impasse that will force both sides to seek coalition partners to form a government," Dróżdż concludes.
