- Forex Market Majors Have Reacted Strongly Against USD
- Clear Outcome Favored by Traders
- NFP Numbers Expected to Show Slow Improvement
As the US election remains undecided, the forex market has shown a generally positive reaction. Major currencies have strengthened against the Dollar since Election Day. This includes both the GBP and EUR which have been struggling lately. The market boost seems to be centered mainly on the move toward clarity and calm that an election result would provide after a protracted period of uncertainty. NFP numbers coming in with a slower growth may also play into the hands of traders if the Federal Reserve moves toward more QE measures.
Major Currencies Pick Up on Positive Sentiment
Forex brokers have noted that both the EUR/USD and GBP/USD have been trading more positively against the US Dollar since reporting started on US election results earlier in the week. Although the final outcome is still unknown, both currency pairs have benefited from a more positive market move. This has pushed traders out of the safe-haven Dollar and into other major currencies as well as the equities market.
Both the Euro and Pound have been struggling recently as COVID-19 cases continue to rise in both the UK and Europe. This is still very much the case as a variety of restrictions remain in place. For now though, both pairs remain buoyed by the election progress. The only situation which may not be ideal for either pair would be a contested outcome which may still happen.
Markets Continue to Rally on Outcome
As those in forex trading remain positive around the pending election outcome, so too do those trading the stock market. Both have continued to rally and show positive signs as a clear election outcome moves into view. Currently, it seems as though the only move that could derail this positive momentum is a contested election.
Although President Trump and his team have begun to mount several legal challenges around the country, the vote in remaining key states continues to lean in favor of a Biden victory. The gap is narrowing in Pennsylvania and Georgia where a victory for the Democratic contender would surely deem any legal challenge effectively meaningless. This is what traders in both markets have been betting on as they seem to very much want and expect a move back to calmer political waters.
Return to Work Slowing for Month
Non-farm payroll numbers are set to be released later on Friday. These are expected to show that 600,000 jobs were added in the month of October. Job creation in the private sector though is a number which analysts expect to fall. This slow return to work may not be all bad news for traders at least.
A sluggish number here will reopen the conversation on more quantitate easing measures that the Federal Reserve could undertake. While not a permanent solution this would see more positive activity from traders hoping to continue the current market rally and positive sentiment.