The U.S dollar was fired up at the first trading session amid currency traders setting their eyes on the U.S election scheduled to hold tomorrow, coupled with a rising number of COVID-19 cases worldwide continuing to weigh on investor bias.
What we know
The U.S. Dollar Index that tracks the greenback against a basket of major currencies was up 0.16% to trade at 94.188 by 6 am GMT.
What this means
It is key to note that the greenback held onto gains from last week, seeing its largest weekly upside since late September during the previous session, as all investors flock en masse to the safe-haven currency.
- The U.S. Dollar Index tracks the American dollar against a basket of other major currencies (like the Japanese Yen, British Pound Sterling, Swedish Krona, and Euro).
- Individuals hoping to meet foreign exchange payment obligations via dollar transactions to countries like Europe, and Japan, would need to pay fewer dollars in meeting such obligations.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in an email to Nairametrics spoke on the prevailing fundamentals that are expected to affect the U.S dollar price movements in the coming days.
“The US election will determine how much fiscal stimulus is possible and whether there will be a new trade war with China. Both the axes are pivotal to USD/Asia’s 2021 outlook.
“The former can support global trade improvement, while the latter could compress (or reignite) the geopolitical risk premia in Asian currencies.
“FOMC is likely to stay put amidst elevated fiscal policy uncertainty. Irrespective of the election outcome, markets are unlikely to overlook a) the vaccine development news in the next few weeks, especially in light of the recent surge in Covid-19 cases in DM, & b) China’s sustained growth resilience vs. the rest of the world.”
That said, Currency traders are presently keeping their bets on the U.S dollar amid the odds, and this shows the election remains very close to calling the winner, as President Trump closes in on Joe Biden’s opinion poll lead, according to different polling outlets seen by Nairametrics.