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The US Election Countdown – Everything you need to know
Mitrade Team
2020-10-22 819

14 days to go in the US presidential election which is seeing the President racing around the purple states as fast as he can. The more rallies he holds, the closer this race will be come. Do not be surprised to see the polls tighten right up as he is targeting counties that only need a handful of votes to swing back to him.


This will put some volatility back into FX and indices and it will probably lead to some gapping and spread widenings the closer we get to election day.


Be mindful of this as the uncertainty and unforeseen results will see very sharp and quick movements, particularly in FX. Mind your stops and your positioning.


Events moving the dial now:


·         House Speaker Nancy Pelosi declared she is ‘optimistic’ a deal could be reached on the latest COVID-stimulus bill and that the value would be in the range of US$2.2 trillion - the amount the Democrats have always wanted.


Curbing that ‘optimism’ was Senate Majority Leader Mitch McConnell stating that if a stimulus package comes before the Senate, passed by the House and also backed by President Trump, “[he] would consider it”.


Furthermore, Republican Senator Thune stated “it would be hard” to find enough Republican Senators to back a $1.8 trillion stimulus let alone a US$2.2 trillion bill.


·         European COVID-19 cases continue to surge. Germany had a record rise of 8,397, Italy 10,874 - the highest level since May and the UK 21,331 as it put Greater Manchester in a strict Stage 3 lockdown. Ireland too entered its strictest lockdown of the pandemic, it’s going to be a very long winter.


This has led to very mixed movements in the USD against the G10, it was weaker against the European group but stronger over the Oceania currencies which is not what one would expect.


EUR/USD is now back above $1.18, jumping some 50 pips in 24 hours to a new 1-month high. GBP/USD continues to gain ground at $1.294.


Compare this to the AUD/USD which hit a new 1-month low of 0.7021, this is a solid support level and should bounce, but it is clearly being tested.


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