U.S. Dollar quiet as Elections dominate headlines

The U.S. Dollar is trading in mostly tight ranges as markets prepare for a day of Elections and the results to come more clearly tomorrow.

Overview

Both houses of Congress could change leadership as well as bring in new faces in what will signify the biggest risk-event in the Biden administration.Polls lately have shown the possibility that the President will have to deal more often with opposition. Additionally, equities seem to be on the rise, with history revealing strong performances following midterm results. There are various scenarios of split houses, the tighter margin for Democrats or Republican control that investors are playing into. It is possible the buck benefits if Democrats stay in the majority in both houses, while treasuries could see a boost if Republicans have the better night. It is perceived by some traders that a larger GOP presence would slow down the growing debt and spending, but anything at this point is only speculatory.On the other side of the world, Chinese officials’ ongoing commitment to defending Zero-COVID measures is being weighed by investors who are trying to find anything positive to hold onto. Oil naturally fell in price as it is believed the Chinese slowdown will only cause further downward demand for fuel in shipping and other sectors globally. We will see how FX flows take in the news as they come in the next crucial 48 hours.

What to Watch Today…

No major economic events are scheduled for today

View Economic Calendar

7 wins in the last 8 quarters! | #1 MXN Forecaster for Q3 2022

Bloomberg ranks Monex USA (formerly Tempus) as the top MXN Forecaster again! Learn More

Monex USA Top MXN Bloomberg Forecaster

EUR ⇑

The Euro is sitting in familiar ranges for now as the EU prepares itself for closing the year in what has been a mild Autumn. While the energy crisis has made for plenty of worry and downwardly revised outlooks, the friendly weather has aided the continent in weathering the very worst estimates from Summer. Tourism has returned to Europe as well as a sense of comfort in consuming and conducting other activities that were shut in the pandemic.

Euro-zone Retail Sales are evidence of the better times materializing, coming in expanding 0.4% as expected while being revised upward in August data. For now, the prospect of higher interest rates and a milder economic reality in the face of fewer energy sources is aiding the common currency’s value.

GBP ⇓

The Pound is currently losing what it had gained yesterday with no major data nor risk-event other than paying attention to what may come from U.S. elections. Other countries are looking to see if U.S. will lead aid towards Ukraine or deviate with a change of the guard. For now, spending in the U.K. will come with a revenue-seeking mechanism as well after years of low revenue collection. We shall see how much impact the buck can have on others as this week progresses with uncertainty over everything.

Daily Market Update