The US Dollar has continued its current run of form with Cable dropping into the low 1.26’s against Sterling. The USD despite concerns regarding the upcoming election just continues to find further momentum. There is a huge amount of belief in the markets that there will be an interest rate hike before the end of the year.

The main debate that many economists are having is that in the short term, who would the Federal Bank prefer; Hilary Clinton or Donald Trump.

Trump has very heavily focused his campaign around changing the tax system and trying to stimulate the huge middle class which exists in America. Potentially his most extreme policy would be the introduction of a levy on Chinese imports. There has been talk of as much of a 45% tax being introduced, which has been estimated to wipe trillions of the Chinese economy. Whilst forcing businesses to make products in the USA to drive growth, there are often further effects that work against a currency.

Hilary Clinton could also change the tax system however is much more likely to go after high net worth individuals. Clinton has been a major advocate in the past of trying to clean up Wall Street and if she is elected President there could be an effect on markets.

Whilst Trump is seen as being loose cannon he may be the safer bet for market confidence as he has experience in business. However his recent comments with regarding not paying tax, demonstrates he understands the system, may suggest an element of hypocrisy with what he might try to achieve.

There will once again be a debate tonight and all eyes will be watching to gain an indication of who’s leading the race. I am fully confident that the polls will come out with a swing in Clinton’s favour as they always have in this race, but after so many surprising events across the world anything seems possible these days.