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US Election – When Will We Get a Winner?

Mitrade

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As we have been suggesting for a few weeks, the US election is on a knife edge. All indications show that Vice President Biden will be the 46th President of the United States. But it’s clear that President Trump will fight it out to the very end with legal challenges and recount petitions. This is far from over and currency markets are reflecting this.

Here are the ranges of the major pairs and the basket itself since the close of the polls on the East Coast to now.

EUR/USD

EUR/USD

USD/JPY

USD/JPY

GBP/USD

GBP/USD

AUD/USD

AUD/USD

DXY

As expected, if Trump took Florida, which he did, FX markets would react strongly and would see a repeat of 2016 becoming fact. It certainly led the bookies to flip their betting markets as fast as they did in 2016 on Florida’s declaration and that sent currencies with it. This will likely to continue in the interim.

Going forward, now there are several factors to consider:

What does the Senate look like?

Currently it looks like the Republicans will hold the Senate and could hold up policy over the next 4 years. Tax and regulatory reform were pillars of Biden’s campaign; this scenario might now be watered down with a Republican-held Senate.

When will the Election be ‘officially’ declared?

It can happen now, or it may take more time if recounts are triggered or petitioned for. In Michigan and Wisconsin, a recount can be petitioned and that looks likely with the Trump camp strongly suggesting it will. But all this needs to be resolved, however, by December 12 under the rules of the US election.

How does this play out?

Biden’s chances of winning are over 80%, but what is clear is that bouts of volatility and gapping in pairs is also likely. Do not be surprised to see spikes on legal announcements from the courts and if both side request challenges in certain county recounts.

Originally Posted on November 6, 2020 – US Election – When Will We Get a Winner?

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