Dollar Makes an Advance as Results Come

Dollar Makes an Advance as Results Come

As election votes start to trickle in. So far they indicate a head-to-head lead by incumbent president Trump, the dollar regains ground.

The greenback retraced minor setbacks incurred in previous sessions following the Republican lead in Florida, a key battleground state.

The USD index, which measures the performance of the US currency against other leading monetary units, hikes slightly to 93.626, mostly moving flat during the day.

It recorded a 0.9% reversal in late hours of Tuesday as traders bet on a clear-cut Biden victory.

The euros shed off a 0.1% to $1.1717, leaving the gains recorded in previous charts where it settled at $1.770.

The sterling pound followed the downward trajectory with the GBP/USD pair settling at $1.3030 after a 0.2% decrease.

In the latest reports, the EU and UK are yet again at another impasse on the post-Brexit deal.

The two parties need to reach an agreement on or before November 15 as the transition period’s expiration date nears.

The two parties are currently weathering a crucial part of the negotiation, with roadblocks involving fair competition, fisheries, and settlement of disputes in place.

In Asia’s foreign exchange charts, the offshore Chinese yuan dropped by 0.25%. 

The CNH could descend further should Trump wins due to the leader’s focus on China on trade matters and several other issues.

Meanwhile, the USD/JPY trades steady at 104.59 without big changes to anticipate throughout the day.

Across the sea, the Australian dollar slashed 0.2% to $0.7143. The country’s central bank retains a dovish monetary policy to keep its bleeding economy afloat.

Investors Are Paying Close Attention to Election Results 

The dollar is not due to make a significant rally, nor a painful reversal until election results give a more certain outcome.

So far, the resulting map is equally dominated by blue and red, giving spectators a hard time to formulate their next moves.

However, it is not only the winning party that is anticipated but also the possibility of a contested election.

Investors are crossing fingers that such a measure would not materialize.

Successive occurrences in the past namely the pandemic and volatile economic performance already weighed on the greenback’s performance on foreign exchange charts.

According to experts, should the losing candidate appeal, such movement could take SPX, bond yields, and USD further down.

For the record, the month-long riffraff on the recount in 2000 elections weighed global stocks downward, including the dollar. 

Market experts are considering the possibility that results may not be readily available overnight.

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