Dubai, United Arab Emirates, (AETOSWire): With less than two months to voting day for the US presidential election on 3/11/2020, and the race between Donald Trump and Democrat leader Joe Biden tightening, financial markets are starting to get the jitters.
On Friday, Wall Street closed at their lowest level of the month following a selloff in US tech stocks due to overvaluation concerns after another month of stellar gains in August. The US equities strong recovery has been supported by optimism around potential COVID-19 vaccines. US-markets led the way with the S&P500 up 7%–its best August since 1984. The Dow Jones also moved closer towards positive territory for 2020 since bottoming out in March at the height of the pandemic but is yet to reclaim its February highs.
US-Dollar Index:The US dollar struggling to find buyers ahead of election. The US-dollar index, which tracks the greenback against a basket of its peers, was closed around 92.80 on Friday. The US election should mark a turning point for dollar perceptions.
EUR/USD:In 2020 the currency pair surged more than 10% against the US dollar. In 2016, EUR/USD increased in the run-up to the election, but that was driven by expectations of Hillary Clinton winning. With Trump’s surprising win, dollar gained, and Euro slipped lower.
USD/JPY:Quite possibly the most important forex pair to watch as the election nears is USDJPY. The currency pair remains under pressure ahead of election supported by recent stock market bearish move and broader USD weakness.
Gold:Yellow metal surged more than 35% this year boosted by lower interest rates and rising coronavirus cases. Gold reached a new milestone with an intraday high of $2,075 on August7. Yellow metal returned as a favoured option for those traders seeking a safe haven during turbulent times and 2020 has been full of uncertainty. The upside rally also supported by a weaker dollar and escalating tensions between the US and China.
Crude Oil:The Market participants believe in case Democrat leader Joe Biden elected will be negative for the oil industry, because he may stop issuing drilling permits for federal lands and waters, which would shrink US oil production by up to 2million b/d by 2025.
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