Market Analysis

The U.S. dollar declined on Wednesday, reaching its lowest level of the year against the Japanese yen following the crucial U.S. presidential debate.

As of 02:36 ET (06:36 GMT), the USD/JPY had fallen 0.72%, while the EUR/USD rose 0.25% against the dollar. The yen's strength was also supported by comments from Bank of Japan board member Junko Nakagawa, who reaffirmed that the central bank is ready to raise interest rates if economic growth and inflation meet expectations.

Bitcoin (BitfinexUSD) also saw losses, dropping 0.7%. At 02:36 ET, the world’s largest cryptocurrency was trading at $56,537.00.

U.S. futures were down as well, with S&P 500 futures losing 15 points, or 0.27%.

During the only scheduled U.S. presidential debate, Democratic candidate Kamala Harris was viewed as having outperformed Republican nominee Donald Trump. The two engaged in heated exchanges throughout the event, touching on a wide range of topics from policy to personal attacks, which seemed to influence investor sentiment.

With the election approaching, the debate has increased expectations of a tight race. Following the debate on September 10, betting odds on the Polymarket platform indicated a shift, with Trump’s chances of winning falling to a tie.

"We're awaiting poll results in the coming days to see if undecided voters are gravitating toward Harris," Citi strategists noted.

"The race remains close for now, and Tuesday’s market response may suggest investors are beginning to refocus on election risks, though the Federal Reserve's policies and the U.S. economic outlook remain key concerns."

"As the election draws closer—and assuming the race stays competitive—we anticipate investors will continue to price in some likelihood of a Trump victory, potentially leading to a stronger dollar as November nears."

Meanwhile, pop star Taylor Swift voiced her support for Kamala Harris in the 2024 election. In an Instagram post following the debate, Swift called Harris a "warrior."

“I believe Harris is a steady, talented leader, and I think our country can achieve much more under calm leadership rather than chaos,” Swift wrote.

Paraphrasing text from "Investing" all rights reserved by the original author.