U.S. Dollar up as Elections results keep coming

The U.S. Dollar is trading in weak ranges as markets digest the incoming results from yesterday’s U.S. elections.

Overview

From what has been gathered and analyzed thus far, the Republican Party did not seem to enjoy the results they expected from favorable polls, making investors wonder if much will change in policy. As a result, it puts the spotlight and focuses once again on the Federal Reserve and whether the American economy can cool down enough to cause deflationary pressures. We mentioned yesterday that the buck could gain if Democrats survived a “Red Wave,” which is what is currently being manifested.Tomorrow’s Consumer Price Index figures will be key to testing if the buck can continue improving. For now, it looks like markets will be fixated on inflation, and there will be plenty to chew once the full results of the elections are in determining if, indeed, there will be more obstacles to President Biden’s agenda. It is also worth mentioning that the world of cryptocurrencies is seeing major developments that thus far have crushed Bitcoin and others.

What to Watch Today…

No major economic events are scheduled for today

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EUR ⇓

The Euro is currently dropping after going up based on the belief that more tightening will be arriving from the European Central Bank as they try to rein in prices. Equities in Europe fell for the first time in four sessions as travel, and automotive shares fell based on lower demand and worry over energy.

On the positive side, it looks like China’s developers have caught a break with financial support from regulators. A more active China can mean more activity overall that improves the economic mood across the globe. We shall see how the shared currency closes this short week as we close on Friday in observance of Veterans’ Day.

GBP ⇓

Sterling has been on major up-down swings lately, at the moment down by over 1.1%. Recently, the situation in the U.K. has been turbulent but hopeful with Rishi Sunak as Prime Minister. Nevertheless, Bank of England officials are concerned that the recession could be heavy and long if the government cannot get a budget together soon. Additionally, we will monitor diplomatically how much more the U.K. is willing to get closer to the EU following attempts by former PM Liz Truss to extend an olive branch.

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