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U.S Dollar Hit a 10-Week Low, Joe Biden Win Projects More Quantitative Easing

By:
Olumide Adesina
Published: Nov 9, 2020, 08:24 UTC

The greenback hit a 10-week low at Monday’s trading session in Asia amid a big political win recorded by the blue party candidate Joe Biden as U.S. president.

USD

Thereby pushing currency traders to reduce their long bets arbitrarily in the U.S dollar via buying other trade-aligned currencies on sentiments that Joe Biden would boost world commerce and trigger more quantitative easing in his approach to support the world’s largest economy negatively disrupted by COVID-19.

Reports from the recently concluded U.S election revealed Joe Biden passed the threshold of the 270 Electoral College votes required to become the 46th United States President over the weekend by winning the key state of Pennsylvania. On the other hand, the main opposition party (Republicans) seems to have kept control of the Senate, though the final standing may not be clear until runoff votes in Georgia scheduled to hold early next year come to effect.

Though the prospects for more U.S. fiscal stimulus package seem to have been strengthened U.S dollar bears, currency traders are still wary of the COVID-19 onslaughts hitting key international markets, partly responsible why the U.S dollar regained some grounds lost at the time this report was drafted.

That said the dollar bulls have a lot to play for, amid macros showing that there would be a moderation of political influence, on the basis that no political party will out rightly control the U.S economy as earlier anticipated, meaning the continual downward pressure prevailing in the currency market might be halted, as it recent price action showing the U.S dollar Index is at an oversold position.

DXY is already trading at its 2-month lows in the 92.175 regions, as traders’ move to risker assets with market sentiments showing global investors increasing their buying positions on global stocks as seen lately in the Dow futures gaining more than 400 points at the pre-open of London are trading session.

Still, the currency traders are lying in wait for this bout of systematic market pressured selling to fade, amid concerns that COVID-19 attacks still remain on major headlines, and until a registered COVID-19 vaccine comes to the market pipeline, buying the safe-haven currency still won’t be a bad idea.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. He is a Member of the Chartered Financial Analyst Society.

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