The U.S. dollar is reportedly likely to strengthen on Friday. The situation comes after the USD weakened against the euro and suffered its biggest weekly decline against the yen in a month. This is because investors are starting to bet on a Biden presidency.

In addition, a large U.S. stimulus is also one factor. Daily movements were reported only slightly and most market participants supported the dollar early in the Asian session. This is because market participants are waiting for the last US presidential debate to be held soon. 

The market could become particularly sensitive to the moment of diversion as the campaign reaches its peak ahead of polling day on November 3. Therefore, all the things and updates about the election will always be highlighted by market participants now.

Dollar Out of Record Lows

The US dollar is rumored to have lifted from a seven-week low on Wednesday against other major currencies. However, according to calculations, the currency is still sitting about 0.8% lower for the week. This number can still change.

The ever-there expectation that Congress will issue a stimulus package before the election and confidence that spending will follow are still believed by many. They don't care who's going to get elected later because it could be that his policies won't change much.

Whoever is going to become president of the United States has encouraged a sell-off in the bond market in anticipation of more government borrowing. The US dollar has been on sale all week as the prospect of stimulus has supported the mood of existing investors.

Stimulus Outlook Effect

The prospect of U.S. stimulus has also put investors interested in riskier currencies. But they remain cautious about this. The underlying prudence has also provided a boost for the safe-haven Japanese yen to get in a better position.

If they get away with it, Biden wins and he proceeds with the stimulus, then they'll go back to the negative U.S. dollar. These conditions are also risky and can be positive for the Aussie and kiwis. This was delivered by Westpac currency analyst Imre Speizer.

However, for now, there is still little overshadow political risk. The risk-sensitive Australian dollar was reportedly up as thin as 0.1%. It was higher on Friday and about 0.7% stronger this week. Further increases are also predicted.

Further increases were limited by growing expectations that the Reserve Bank of Australia would lower interest rates when it meets with various parties in November.  However, this is still a rumor and has not been a deal.

Other Currency Movements

The New Zealand dollar reported a slight slip of 0.1% on Friday after weaker-than-expected inflation data. However, its position has now climbed back by almost 1% for the week. Slowly but surely the currency managed to lift its position.

The Japanese yen also reportedly fell overnight after U.S. House of Representatives Speaker Nancy Pelosi said there had been progressing in stimulus talks; Unfortunately, that progress was only about half a percent higher for the week and has strengthened nearly 3 percent since April.

The euro itself has risen as much as 0.8% this week, although it pulled back overnight due to a surge in COVID-19 cases in Europe. The UK, European and US Purchasing Managers' Index figures will be released on Friday. This data will be of particular concern to the public.

Sterling Also Declined

Sterling reportedly slipped overnight due to uncertainty over the outlook for Brexit. But it rose 1.2% this week and stayed above $1.30 thanks to expectations that the UK and EU could reach a trade deal before the transition period ends on December 31.

On the other hand, other commodity prices are also rumored to remain in stable condition. For example, is oil. Commodity prices are reportedly still stable. One cause is Russia preparing to extend production reductions. This step is considered quite appropriate.