Dollar Steadies on U.S. Presidential Debates 

  • 23
    October, 2020

    Investors began to wager on a Biden presidency and a big U.S. stimulus which contributed to the largest weekly drop of the dollar against the Yen and a poor week against the Euro. 

    The DXY slightly moved mostly in the dollar’s favor in the Asia sessions as traders awaited the final U.S. Presidential debate. 

    Markets could be sensitive to any vote-shifting moments as campaigning hits fever pitch of polling day on Nov. 3. 

    No matter who gets elected, persistent hopes of a stimulus package before the election and confidence that spending will follow will continue either way. 

    The prospect of a stimulus has supported investor’s mood and made them look upon riskier currencies instead. This has likely boosted the safe-haven Japanese yen.  

    “If we do get through and Biden wins and he pushes on with stimulus, then we’re back in to a negative U.S. dollar, risk-on, positive for Aussie and kiwi kind of story,” said Westpac currency analyst Imre Speizer 

    “But for now, there’s still a bit of a political risk overhang,” he said. 

    Analysts said the debate may not move markets immediately, but that political uncertainty over the election meant for a risky environment.

    “There may be verbal fireworks but we expect no material impact on the dollar,” said Commonwealth Bank of Australia currency analyst Kim Mundy. 

    “We continue to see a high risk that the election outcome is delayed or contested,” she said, adding to near-term downside risks for the Australian dollar. 

    Technical Outlook 

     

    In the daily charts of GBP/USD, the sterling was down against the dollar Friday morning in Sydney session. 

    Sterling slipped overnight on uncertainty over Brexit outlook, but it is up 1.2% this week and is clinging on above $1.30 thanks to hopes that Britain and the European Union can reach a trade deal before a transition period ends on Dec. 31. 

    British, European and U.S. Purchasing Managers’ Index figures are due later on Friday may shift the mood of the pair. It is best to proceed with pre-caution for this pair today or staying in the sidelines may be the best strategy to use for this pair’s trading day. 

    Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!   

     

    Do you want to learn more about forex trading? Sign up now on our FREE forex webinar and reserve your FREE seats while it still lasts!   

     

    Risk Disclaimer:   

    Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility. 

     

     

Due to COVID 19 outbreak, we have transitioned everything ONLINE. This is to make sure there is zero impact on your safety, security and still maximize your learning experiences with Learn to Trade.

You can close this pop-up to see all our online schedules.