The dollar is under pressure from a weak labor market and the U.S. elections. What are Commerzbank's forecasts?

Ulrich Lochmann, Head of Foreign Exchange and Commodity Trading at Commerzbank, provided important analyses regarding the movements of the US dollar amidst the October labor market data while anticipating the US presidential elections.

In this regard, the economic analyst stated that the labor market report released on Friday did not have any lasting negative impact on the US dollar; in other words, the extremely low number of new jobs created in October did not harm the dollar's performance for two reasons:

First: The unemployment rate was not surprising and did not rise.

Second: There are enough specific influences to explain the downward trend in private sector job data, without assuming that the labor market in the United States is in a free fall.

Overall, it seems that the strongest influence on the movements of the US dollar is the upcoming presidential elections in the United States, set to begin tomorrow, Tuesday. Lochmann explained that the US economy could witness drastic changes if Donald Trump wins the presidency, based on Trump's recent announcements and statements.

The polling data published over the weekend may have shaken the confidence that some market participants had in Trump's victory, significantly weakening the dollar during today's trading.

Regarding the election polls; the economic analyst mentioned two polls that are particularly noteworthy: one conducted by The New York Times, which revealed Kamala Harris's lead in North Carolina and Georgia, two states where most polls had shown Trump's lead until now.

The second is a more accurate survey that showed Harris leading in Iowa, a state that has traditionally been more loyal to the Republicans, thus raising doubts about the recent polls supporting Trump's victory, suggesting they may have a systematic error.