Investors are reassessing Donald Trump’s chances of re-entering the White House, given polls which emerged over the weekend, indicating Kamala Harris may have gained ground in key battle ground states, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
As investors brace themselves for the US elections which has entered into its final phase, the dollar has fallen back slightly, as the chances of Trump setting off a fresh tariff frenzy, pushing up inflation and interest rates, seem to have retreated a little, Streeter added.
The elections are currently too close to call, so considerable swings in prices are expected.
Streeter added: ‘Investors are bracing for a week of potential volatility, with the highly fractious US Presidential election in focus and key interest rate decisions looming. For now, the FTSE 100 has shaken off nervousness and opened in the green, making fresh gains after Friday’s recovery.
"Miners and banks were on the front foot in early trade and energy giants have helped offset wariness by gaining ground of the back of a stronger oil price. The benchmark Brent Crude has extended gains, to trade around $74.5 a barrel after the cartel OPEC+ again delayed plans to increase output for a month."
Rupert Thompson, the chief economist at IBOSS - part of Kingswood Group, said the close presidential race could bring market shifts.
He added: "A Trump win could lead to higher tariffs and inflation, while a Harris victory would be unlikely to change fiscal policy significantly without Democratic control of Congress."
