Daily Market Update

U.S. Dollar lower ahead of busy Election Day

November 06, 2018

The U.S. Dollar is trading in weaker ranges this morning ahead of a very busy Election Day.

Overview

Mid-term campaigning finally comes to an end and markets are ready to maintain their momentum once this passes. Analysts and experts predict that a Republican Senate and a Democrat House of representatives are the most likely scenario and one that would not disrupt equities. $USD could be more volatile throughout the day, but this follows the swing-nature of current trends.

Trade concerns remain a hot issue, especially after some tough public commentary from Chinese Vice President Wang Qishan at an event in Singapore saying that China is ready and willing to talk trade with the U.S., but will not be “bullied by an imperialist power.” The tone could change the approach and perhaps include more obstacles than just tariffs. We think plenty of counterparts to the greenback will be on a bit of recovery mode, mostly after falling to multi-month and multi-year lows against the buck.

 

What to Watch Today…

  • No major events scheduled for today.

The complete economic calendar can be found here.

 

EUR

The Euro is higher in value at the moment, but could quickly lose its gains once election results in the U.S. determine a final result. Economically, the continent is seeing somewhat of a slowdown as revealed by the Markit Eurozone Composite Purchasing Managers Index with an expansion reading of 53.1, the lowest since 2016.

While French and German figures exceeded their expectations, clear contraction in Italy dragged the continental average. Additionally, a survey of business expectations registered at its least optimistic since 2014.

GBP

The Pound is at its strongest level in three weeks, but not due to any positive news. While all eyes are on the U.S. and its civic duty, Brexit remains in the middle of negotiations. We are only getting closer to the deadline and all the issues that we have incessantly heard about continue to be unresolved: Irish border, remaining in customs union indefinitely, and treatment of EU citizens in U.K. Any progress will come as a surprise, but naturally there is some dollar weakness with recent profit-taking as well.

 

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