Currency Market Analysis

Nov 05, 2020 | Currency Market Analysis

Global Themes

USD lower as Biden’s chances firm

The US dollar has been closely tied to the fate of presidential candidate Joe Biden over the last 24 hours with the USD rising and falling in line with Biden’s probability of wining.

The prospect of a Trump victory caused markets to speculate about a resumption of US-China trade tensions, pressuring the SGD.

Overnight, after Biden was awarded the key battle ground states of Michigan and Wisconsin, meaning that while the result remains uncertain, a Biden win looks more probable.

US shares jump

The USDSGD dropped in line with gains in equity markets with the US’s Dow Jones index up 1.3% and the technology focused Nasdaq up 4.4%.

The SGD gained in most other markets with EURSGD back near three-month lows and the JPYSGD back at two-week lows.

Knife’s edge

The US election results remain in focus with Nevada, Georgia and Michigan key. A win in any of these states, presuming Biden holds Arizona, would see Biden achieve victory.

As a distraction from US politics, the US Federal Reserve meets at 3.00am tomorrow.

US employment figures are released tomorrow night and will be closely watched after a large miss in last night’s ADP reading. The ADP result saw 350k new jobs versus the 650k expected.

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