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EUR/USD spot rate at time of writing: 1.1760Bank transfer rate (indicative guide): 1.1347-1.1430FX specialist providers (indicative guide): 1.1600-1.1653More information on FX specialist rates hereA Joe Biden win in the upcoming November presidential election would likely prompt Dollar weakness, while a win for Donald Trump would likely trigger gains for the currency shows new analysis from Goldman Sachs.

In addition, a Biden win combined with a Democrat win of the Senate would "pull forward" Dollar weakness, according to the Wall Street bank.

"Any change that raises the odds of a “blue wave” scenario—where former Vice President Biden wins the presidency and Democrats also take the Senate— should accelerate US Dollar weakness," says analyst Zach Pandl at Goldman Sachs in New York.

The odds of a Biden win and a Democrat sweep of Congress have been steadily increasing with The Guardian's national poll tracker showing Biden is on 50% and Trump on 41% nationally. In the all-important swing states, Biden leads in all but one of eight (Iowa).

Goldman Sachs are of the view that a strong performance from the Democrats could weigh on the Dollar, "due to the Biden campaign’s plans to raise the corporate tax rate and expand government spending, and because a potential Biden White House would likely take a different approach to many foreign policy issues".

On the matter of the economy, which has consistently been by voters as a Trump strength, Biden is now seen to be catching his opponent. A CNN poll released Tuesday showed Trump and Biden tied among registered voters at 49% apiece on the question of who would handle the economy better.

Above: National poll tracker by The Guardian.

Among likely voters, Biden gets 50%, compared with 48% for Trump, this compares to the same poll which in May showed 54% of registered voters said Trump would handle the economy better, compared with 42% for Bide

Analysis from Goldman Sachs shows that the Dollar weakened when polling following the first presidential debate showed Biden had the better night and odds of a Biden win went higher.

"A Biden win would result in a new approach to U.S.-China relations. The Dollar also weakened the following morning (primarily against pro-risk crosses) when Treasury Secretary Mnuchin suggested another fiscal relief package might still be possible, suggesting the currency may also depreciate under a possible large fiscal stimulus in the event of a Biden win," says Pandl.

Goldman Sachs are holding off on recommending new Dollar shorts for now as they await more information on how the President’s health situation will affect the race.

"But we view current levels as relatively attractive to express our positive cyclical views—especially if polling continues to indicate a sizeable lead for Biden," says Pandl.

The Dollar is meanwhile showing short-term sensitivity to the prospect of whether more stimulus from the current administration will be forthcoming,

Stock markets and commodities fell while the safe-haven Dollar, Yen and Franc were bid higher after President Donald Trump unexpectedly ended negotiations with Democrats over a large coronavirus relief and stimulus package.

The question of whether the Democrats and Republicans would agree on a new multi-billion dollar aid package for the covid-hit economy had become a key concern for markets of late, with Trump earlier in the week urging fast action on a fifth major coronavirus aid bill to augment the more than $3 trillion approved earlier this year.

But with both sides looking unable to reach a compromise Trump ultimately pulled the plug. "I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business," said Trump.

"U.S. President Donald Trump’s decision to call off U.S. fiscal stimuli negotiations until after the U.S. elections has already triggered some USD buying, dragging EUR/USD and GBP/USD back below 1.1750 and 1.29, respectively," says Roberto Mialich, FX Strategist with UniCredit.

The Pound-to-Dollar exchange rate fell 0.78% on Tuesday to close the day at 1.2875 courtesy of the Dollar's surge in the wake of the news. The Euro-to-Dollar exchange rate meanwhile fell 0.40% to close the day at 1.1733.

But the GBP/USD and EUR/USD pairs are at 1.2918 and 1.1760 respectively on Wednesday, suggesting there has been no significant follow through overnight as Trump made clear in subsequent tweets that he was still open to some element of stimulus support.

"If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?" said Trump.

This appears to have pared some of the sharp market moves that followed the announcement that talks were off.

"In further tweets he did highlight the stimulus he would sign off on, including support for airlines and to protect pay. As such, markets have stabilised within recent ranges," says Robin Wilkin, Cross Asset Strategist at Lloyds Bank.

"The Dollar lost some of the ground gained yesterday due to an increase in risk appetite, as Donald Trump appeared to have a late-night change of heart, tweeting about the need for financial support for struggling families and businesses," says Ricardo Evangelista, Senior Analyst, ActivTrades.