Market participants are mainly focused on the US presidential elections. Despite gloomy forecasts, the US dollar is still climbing. Although the US epidemiological situation is getting worse and prevents the greenback from gaining in value, the currency has kept its dominance. Moreover, forecasts have become more positive. Gold and foreign exchange reserves of central banks, international settlements, and cross-border lending show an obvious shift of the US currency from the dominant positions. However, the events that took place at the end of September proved that the US dollar would not give up.

Previous week, the US dollar index showed the best performance for the first time in six months. In August, investors were actively selling off the greenback because of the divergence in the economic growth of the euro one and the United States. Notably, the euro has no chances to recover amid the S&P 500 correction.

The current concerns are associated with the upcoming presidential elections that will be held in November. Donald Trump announced his rejection of the peaceful transfer of power, which outlined rather vague prospects for the markets. Although the market expects a storm after the final voting results are announced, it is expected to be small. In any case, the situation of complete chaos is still poorly understood by investors. At the same time, in an atmosphere of anxious expectation, the focus has shifted to those currencies that previously showed tepid reaction to the US election. For example, the Russian ruble may be seriously affected by the victory of Joe Biden, because the risks of additional sanctions against Russia will begin to grow actively.

According to opinion polls, liberal Joe Biden will win the race. However, expectations do not always meet the reality. The dollar is doing its best to keep its positions. According to analysts, it is extremely risky to open buy deals on the EUR/USD pair. The euro still highly depends on the expected second wave of the coronavirus in European countries. If consequences of the impending pandemic turn out to be more serious than this spring, the uptrend will be stopped.

The US stock market is likely to be even more volatile in the coming week. This is primarily due to the start of the first debate before the election between incumbent President Donald Trump and Democratic candidate Joe Biden. The uncertainty inherent in the US election, as well as the likely delay in announcing the winner, strongly affected the market picture. Thus, the S&P 500 index showed a drop of 10% after a record high reached in early September.

Nevertheless, the greenback is supported by investors' risk aversion as the US dollar is considered to be the most reliable asset among traders. The US macroeconomic statistics, including the release of the final estimate of GDP in the second quarter, as well as the publication of the US unemployment data for September should clarify the situation.