Forex Market Upbeat on US Election Day

• Euro Gaining Slightly as Election Approaches
• Possible Outcomes to Dictate Next Moves
•  Stock Market Also Look to Open Positively

There have been positive movements in the forex market today with major currencies like the Euro and Pound both starting the day positively against the US Dollar. The Australian Dollar has also gained strength against the Greenback with the US Presidential election very much in focus as the key driver. Three potential outcomes could see the market go in very different directions though at the moment traders seem to be hopeful of a clear and positive outcome. This feeling is also echoed in the futures market as major markets trade positively.

Euro Trading Off Lows Despite Coronavirus Concerns

The Euro has picked up well to start the day. It is now trading closer to $1.17 and off previous lows on optimism of a Democratic victory at the polls today. With no significant economic data to move the market from the European side today, those forex trading the Euro will have a keen eye on the election outcome.

This does not cover over the fact that the currency still has difficulties as a result of the pandemic. Rising cases across the region have seen the introduction of new lockdowns in several countries which are all economic powers in the area. France, Germany, the Netherlands, and the UK have all announced new measures to try and curb the spread of the virus.

How Election Outcomes May Impact Market

With record numbers turning out to vote and several states already having passed the number of votes they recorded in the 2016 election, it is safe to say that today marks a hugely significant day in the roadmap of the nation. Forex brokers can expect some reaction from markets regardless of the outcome.

A strong and decisive democratic victory is thought to be what would help the forex market bounce. The certainty it could provide to traders would see them branch out from safe-haven assets like the US Dollar with confidence. On the other side, a closely fought election which comes down to a few key states, or even a contested election could force traders into unpredictable waters. The level of uncertainty that would accompany an undecided or prolonged result is thought to be the last thing which many traders want to see.

Futures Market Points to Extending Gains

Stocks on Wall Street also appear to be heading for a positive opening bell to continue the gains of Monday. Futures trading from all major indexes pointed to gains as the market recovers from a rollercoaster period in recent weeks.

Analysts have cast their views with many feeling that any outcome besides a contested election could see gains in the stock market. Despite potential for tax increases, the largest of these gains is forecast to happen if there is a strong Democratic victory and so-called “blue wave” in the Senate elections. This would pave the way to a substantially increased stimulus than has been on offer from the current administration.