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The US elections Uncertainty Sends EUR/USD and Gold Lower

The US elections Uncertainty Sends EUR/USD and Gold Lower

Trump could be preparing for a legal battle while demand continues on safe-haven and sends risk related currencies lower.

From the start of this week, eyes were focused on US elections. These elections have special importance as come in the middle of one of the worst pandemics in the century and directly connected with vital issues such as the US fiscal stimulus package, tax policy, and the US trade relations with China and the rest of the world.

Today, Trump has proclaimed himself the winner in some decisive states like Michigan, and Pennsylvania meanwhile there still a big percentage of votes have not been counted, and while Trump has the edge in what is could the “in-person vote” Biden has the advantage of “the mail vote” hence, Biden has asked to wait until counting mail votes.

All of this concludes that it is too early to know who the President of the United State will be especially if Trump contested the results in case he loses before the Supreme court. In that scenario, markets could increase the demand for safe havens such as the US Dollar.

Equities

Global stock markets closed in the green on Tuesday for the second day in a row in what looked like an expectation of Biden presidential victory. However, the scene has changed on Wednesday and most of the US and Europe’s stock markets have lost all Tuesday gains, in preparation for the contested result’s scenario.

Stock Market

Change %

S&P 500

-1.1%

Dow Jones

-1.5%

NASDQ

+0.7%

Japan 225

-0.8%

DAX 30

-2.4%

FTSE 100

-1.8%

CAC 40

-2.2%

EUR/USD and Main FX Markets

The greenback recovered all yesterday’s losses due to US elections uncertainty. The US Dollar index rose by 0.5% on Wednesday however, could not break above 94.30 and maintained its sideways move.

The EUR/USD rebounded around the 1.1600 thresholds and kept its neutral outlook. A close below 1.1621 could change it to negative.

The GBP/USD reversed direction and dipped below 1.3000. The pair’s outlook remains neutral while above 1.2772.

Gold and Oil

The Crude price recovered some territory this week as OPEC hinted at a cut extension however, US elections uncertainty weighed on the oil price on Wednesday. The Brent Crude slipped by 0.5%, a close below $39.60 could send the price towards 35.00.

The Gold price retreated on Wednesday below $1,900/oz amid increased demand on the US Dollar. That said, the precious metal has kept its neutral outlook unchanged. A close below $1,861 would change it to negative.

Looking Ahead

Markets will follow the US elections updates all day and will keep an eye on the US balance of trade at 2:30 PM (GMT) and the US non-manufacturing PMI numbers at 4:00 PM with the change in the US oil stockpiles at 4:30 PM.

Esta información/estudio preparada por Mahmoud Alkudsi no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.

El estudio proporcionado no constituye los puntos de vista de JME Financial Services (Pty) Ltd., ni es una invitación a invertir con JME Financial Services (Pty) Ltd. El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.

A partir de la fecha en la que se publique el informe, el analista de estudios y su esposo/a o familiares que dependen financieramente de dicho analista, no mantendrán intereses en los valores recomendados en este informe (“como “intereses” se incluyen la titularidad directa o indirecta de los valores).

El analista de estudios no está contratado por JME Financial Services (Pty) Ltd. Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..

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