A resurgent Trump and higher USD – DBS
Source Fxstreet
US election risks are dominating markets amid a resurgent Trump. The betting odds for a Trump win has shortened markedly over October, and this is propelling US yields higher and lifting the USD, DBS’ FX analyst Philip Wee notes.
DXY approaches 104, near its August high
“Polls from FiveThirtyEight now show Trump leading Harris for the first time in Pennsylvania and almost catching up to Harris in Michigan, which are two major swing states. A broad Republican victory under Trump entail raise risks of wider US budget deficits. The Committee for a Responsible Federal Budget has calculated that Trump’s proposed fiscal policies could result in USD7.5trn more debt over ten years, while Harris’s plans could add USD3.5trn of debt.”
“Tariffs are also likely to be hiked by Trump, which could lift the USD, particularly against Asian exporter currencies. Meanwhile, Fed officials including Schmid, Logan, and Kashkari had called for a more gradual pace of Fed rate cuts, giving uncertainty in the economy.”
“Daly underscored that policy was still tight, and that she has not seen reasons to stop cutting rates. Markets have moved from pricing another 70bps of cuts this year at the start of Oct, to just 40bps of additional cuts. The adjustment of rate cut expectations is already substantive and had lifted the DXY towards 104, near its Aug high. The USD may not benefit as much from the trimming of rate cut expectations going forward.”
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Bitcoin briefly loses 2025 gains as crypto plunges over the weekend.Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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Ethereum is trading near $3,150 and just 8% above a key $2,895 long-term holders’ cost basis, with on-chain flows, macro uncertainty and support around $3,000–$2,800 all shaping what comes next for ETH.
